Tesla and Panasonic: A “giga-collaboration” for the future of electric cars and batteries

31 May Tesla and Panasonic: A “giga-collaboration” for the future of electric cars and batteries

During last decade, hopes of creating an electric vehicle powerhouse have triggered a growing number of alliances among car companies, battery makers and other technology developers.  It’s worth to highlight among those the continued partnership between Tesla and Panasonic.

From their very initial years, Tesla started to collaborate with Panasonic to produce the highest energy density electric vehicle battery packs. Since then, the Tesla-Panasonic partnership has come a long way. In 2009, Panasonic signed an agreement to supply lithium-ion battery cells to Tesla Motors for its electric vehicles. Later, the Japanese company decided to invest 30 million dollars in Tesla. Both company started to collaborate in the development of a next generation of battery cells for electric vehicles, and Tesla chose Panasonic as its preferred lithium-ion battery cell supplier.

In the coming years, the Tesla-Panasonic partnership deepened with more agreements until the collaboration reached a new level when in 2016 Panasonic decided to invest up to 1.6 billion dollars in the Gigafactory project that Tesla initiated two years earlier.

Hammering out ingrained cultural differences

That new level of collaboration showed itself in different ways. Yoshihiko Yamada, previously the CEO of Panasonic’s North American operations, was decided to become the company’s liaison to Tesla. Yamada spent a year working with Elon Musk’s company to hammer out such thing as financials and building location.

But, more importantly, Yamada most important mission was to overcome the ingrained cultural differences between an American company specially used to act very quickly and top-down and to take financial risk if necessary to be first; and the relatively conservative 100-year-old Japanese corporation. Yamada pushed for constant contact between the two teams in order to foster trust and force them to operate at the same speed.

A win/win from past to future

Tesla’s more recent agreement with Panasonic for the solar energy business made it clear that their association isn’t just limited to cells and battery manufacturing. Panasonic will join Tesla’s solar R&D team acquired through the SolarCity merger to work on developing next generation of solar photovoltaic technologies. As part of the new agreement, Panasonic is covering required capital costs for a new factory in Buffalo (New York) and Tesla has agreed to a long-term purchase agreement commitment.

But Panasonic’s financial investments in Tesla were never the only support provided. The long history of the Japanese company is also an asset Tesla can learn from in order to successfully grow. For Panasonic, Tesla investments and collaboration fits on its 10-year old vision to embrace a wide variety of emerging technologies, from the Internet of Things (IoT) to robotics.

Panasonic’s investment in Tesla can also be considered as an affirmation of the power of branding in a yet nascent stage of the electric car market. On the other hand and beyond the partnership enabling to further improve their battery pack while reducing cost, Panasonic’s investment came also for Tesla as a powerful endorsement of their technology.