Tesla (NASDAQ: TSLA) is working exclusively with Panasonic Corp. for its Model 3 electric car battery cells according to Chief Executive Elon Musk. Musk announced this news in a tweet Tuesday night. Panasonic Corp will be also responsible for the higher-end Model S sedan and Model X SUV.
Samsung SDI, which makes batteries and displays, was apparently working with Tesla’s new and upcoming Model 3 electric car, according to the latest rumors. But Musk clarified and set the record straight on Twitter last night, announcing that the company was working exclusively with Panasonic. “Would like to clarify that Tesla is working exclusively with Panasonic for Model 3 cells. News articles claiming otherwise are incorrect,” Musk tweeted.
Panasonic reported they couldn’t handle the abundance demand of batteries for the new Model 3, and perhaps Samsung SDI could pick up the slack. This single tweet from Musk made Samsung SDI’s stock slide 8 percent, or loss nearly $580 million, while Panasonic’s stock price jumped about $800 million.
The exclusive work between Tesla and Panasonic is great news for the Japan-based Panasonic. However, if it’s all about the battery, the Japanese company might be easily impacted.
On the other hand, this deal also means Tesla is relying on a single supplier for its batteries which is uncommon practice in the automotive industry. Most automakers rely on two or three suppliers. This practice gives them more flexibility and also helps lower costs.