Tesla & Panasonic Update Contract, Tesla Achieves 400+ Mile Range EV
Tesla / Panasonic Update Contract
(TSLA) -Get Report filed a Form 8-K today announcing changes to their supplier agreements with Panasonic. The most interesting disclosure was a new pricing agreement between the two companies. Though the deal was agreed upon on June 10th, the new agreement is effective as of April 1st, 2020, the first day of Tesla's second quarter.
"On June 10, 2020, Tesla and Panasonic also entered into the 2020 Pricing Agreement (Gigafactory 2170 Cells) (the “Agreement”), effective as of April 1, 2020 until March 31, 2023, relating to the manufacture and supply by Panasonic of lithium-ion battery cells at Gigafactory Nevada. The Agreement is subject to the 2020 [General Terms and Conditions] and, among other things, sets forth the specific terms between the parties with respect to pricing, planned investments and new technology, as well as production capacity commitments by Panasonic and purchase volume commitments by Tesla over the first two years of the Agreement." - Tesla Form 8-K
While the pricing adjustments are confidential, this could help explain Tesla's price reductions on the Model 3 in late May, roughly two weeks prior to reaching this agreement.
Tesla Model S Achieves 400+ Mile Range
In a blog post on Monday, Tesla announced that the Model S had been re-tested by the EPA and has officially become the first production electric vehicle with an all-electric range of 400 miles or more.
While this update was expected based on Elon Musk's comments on Tesla's Q1 earnings call, the milestone is still quite an achievement. When Tesla began shipping the Model S in late 2012, the maximum EPA range was 265 miles. Today's EPA range of 402 miles represents a 5.3% compound annual growth rate in range since initial release of the Model S. Perhaps more impressive is the improvement in range seen over the last year despite no increases to the Model S battery pack size.
"Starting today, all North American Model S Long Range Plus vehicles have an official EPA-rated range of 402 miles, representing a nearly 20% increase in range when compared to a 2019 Model S 100D with the same battery pack design." - Tesla
Tesla attributes these efficiency gains to four main improvements:
- Significant Mass Reduction
- New “Tempest” Aero Wheels and Tires
- Increased Drive Unit Efficiency
- Maximizing Regenerative Braking
Small improvements in each of these areas has led to dramatic improvements in overall efficiency.
"While each of these changes are relatively small in individual impact, our unique ability to introduce them into active manufacturing lines enables significant gains in efficiency, range, and overall value when combined." - Tesla
Musk Dismisses Larger Model 3 Battery Pack
The Tesla community was abuzz yesterday discussing the possibility of a larger, 100 kWh battery pack being tested for the Tesla Model 3. Elon Musk dismissed the suggestion on Twitter in a response to a tweet from Teslarati.
"No larger pack Model 3 is in development" - Elon Musk
Musk followed up his tweet by mentioning that it also applied to Model Y. While it's possible Tesla could have already developed a larger pack, or that Musk could be referring to the physical size of the pack, it seems wise to operate under the assumption that Tesla will not be increasing the battery pack size on Model 3 or Model Y in the near future.