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Tesla and Panasonic seal 3-year battery supply deal

Agreement covers pricing and investments at Gigafactory in Nevada

The new agreement commits the partners to certain prices and purchase volumes.   © Reuters

OSAKA -- Electric-car maker Tesla and Japanese partner Panasonic have entered into a new three-year agreement on the supply of batteries from the sprawling Gigafactory 1 in the U.S. state of Nevada.

Signed June 10 and announced by Tesla on Tuesday, the agreement sets terms for pricing and requires the U.S. company to purchase a certain amount of batteries from Panasonic in exchange for meeting production capacity commitments over the first two years of the contract period.

The agreement, which came into force retroactively from April 1, also covers "planned investments and new technology," according to Tesla.

The announcement comes after Chinese authorities gave Tesla approval to use a new type of battery in vehicles made at its Gigafactory 3 in Shanghai.

Panasonic Chief Financial Officer Hirokazu Umeda had said in May that the two companies were discussing the possibility of additional investments at Gigafactory 1.

Battery production at the U.S. plant began in 2016, but the relationship between Tesla and Panasonic since then has not been without friction, as the Nikkei Asian Review reported last year.

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