Tesla is making deals with several battery manufacturers in China for Gigafactory 3 in Shanghai, but the company is expected to eventually make its own batteries. Now Panasonic, Tesla’s partner for Gigafactory 1, denies any plan to partner with Tesla on Gigafactory 3 battery production.

As of now, Panasonic is the only approved battery cell supplier for Tesla’s vehicles, but things are changing fast.

Since Tesla’s inception, Panasonic has always been the automaker’s sole battery supplier for vehicles with the very small exception of a short-lived Tesla Roadster 3.0 battery replacement program.

Panasonic made cells in Japan and exported them to California for Tesla’s Model S and Model X programs, while the two companies partnered to make the cells for Model 3 at Gigafactory 1 in Nevada.

Over the last few years, Tesla started using battery cells from Samsung SDI and LG Chem for its stationary energy storage products, but Panasonic always had the exclusive contract to supply the automaker with battery cells for its electric vehicles.

Now that’s apparently about to change.

Earlier this year, we heard that Tesla made a battery supply deal with LG Chem for the Model 3 produced at Gigafactory 3, and it looks like they will split the capacity with CATL.

Originally, Tesla CEO Elon Musk said that the automaker would buy cells from other companies to supply Gigafactory 3, but it would eventually move to make battery cells at the site.

Panasonic has been rumored to partner with Tesla to make the cells in China, but Panasonic CEO Kazuhiro Tsuga told reporters at a strategy briefing last week that they don’t have plans for that (via Reuters):

“We don’t have any plans at the moment to set up a production site in China for Tesla’s Chinese business. It is up to Tesla to decide whether it would use Chinese-made batteries from other manufacturers or get batteries from our Gigafactory 1 (in Nevada),”

Lately, Tesla’s relationship with Panasonic has apparently hit some hard times as the former seems to be preparing to build its own battery cells without a partner.

The automaker recently all but confirmed that it’s going to manufacture its own battery cells.

Earlier this year, Tesla acquired an ultracapacitor manufacturer called Maxwell, but it has been speculated that the acquisition is more likely related to the company’s new Li-ion electrode technology.

Later, they also acquired an engineering firm with expertise in making equipment for battery manufacturers and we reported on Tesla starting to list jobs for battery cell manufacturing.

Electrek’s Take

I remember Elon specifically saying that Panasonic will likely be a supplier of battery cells for Gigafactory 3, but Tesla appears to have instead chosen LG and CATL.

I tend to believe the talks about the Tesla-Panasonic relationship deteriorating.

Early on in the Gigafactory 3 project, I believe Tesla inquired about Panasonic’s interest in the project, but they have since started to put more resources toward producing their own battery cells.

We should know more about these plans early next year.

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