PALO ALTO, U.S. -- Tesla will continue buying batteries from longtime Japanese supplier Panasonic until at least 2022 despite the U.S. electric vehicle maker's plans to produce its own cheaper alternative.
Tesla revealed on Monday that it has signed a new pricing agreement with Panasonic for lithium-ion batteries. However, it did not specify whether this involves the 4680 battery cell, a more cost-efficient unit that Tesla unveiled in September last year, which the company said would significantly reduce the cost of electric vehicles.
Nikkei Asia previously reported that Panasonic will begin producing prototypes of the 4680 for Tesla as early as 2021. Though Tesla plans to make the new cell itself, battery industry watchers say Panasonic will seek to take on some of the manufacturing, as it is unlikely the automaker will be able to handle the production entirely on its own.
In response to Nikkei's request for comment, Panasonic said it "does not comment on the details of contracts."
Shares in Panasonic closed 3.23% higher on Tuesday in Tokyo, compared with a fall of more than 0.3% for the Nikkei 225 index.
The battery announcement came the same day that Tesla's share price hit a new high, closing at $729.77 on Monday, the first trading day of the year, to give the company a nearly $700 billion market capitalization.
The strong performance followed Tesla's announcement over the weekend that it delivered 499,550 vehicles in 2020, just shy of the company's half a million delivery goal but well above Wall Street analysts' estimates and a jump from the 367,500 cars delivered in 2019.
Tesla's pandemic-defying performance has been supported by surging demand from China and a production ramp-up at its two-year-old Shanghai factory.
Tesla said it has begun Model Y production in Shanghai with deliveries expected shortly. The company started taking orders for its China-made Model Y sport utility vehicles last week after it slashed the price by 30% to 339,900 yuan ($52,600), according to the Tesla China website.
The company's Chinese website was temporarily unavailable following the new price announcement. "Our website is currently overwhelmed by new orders. Please be patient with us," Tesla said in a Jan. 1 post on Weibo.
Tesla said in a tweet that it "produced and delivered half a million cars" in 2020 even though the actual figure for deliveries was 450 units short of 500,000. The California-based carmaker manufactured a total of 509,737 vehicles last year, according to a company filing.