The news that Panasonic will be the lithium battery supplier for Tesla’s Model S doesn’t come as a surprise, but it’s still another blow to the US green energy industry which continues to lose out to lower cost Asian competitors.   It’s more apparent in the solar space and becoming increasingly apparent in the battery space.   Panasonic and Tesla have been working together for a couple years on battery development and Panasonic invested $30 million in the company so the deal has been expected. 

This supply agreement provides Tesla with enough batteries to build 80K vehicles over the next four years and a guarantee of at least 6K lithium batteries for next year to meet the initial production run satisfying the existing 6000 Model S reservations which continue to climb.  More importantly Tesla says the deal will allow the company to meet its cost and margin targets for the Model S.

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"It is a powerful endorsement of our technology that Panasonic, the world’s leading battery cell manufacturer, has chosen to partner with Tesla to advance electric vehicle performance and value," said Tesla Co-Founder and CEO Elon Musk. "Incorporating Panasonic’s next-generation cells into Model S batteries will ensure unrivaled range and performance. We are very grateful for our great partnership with Panasonic.”

Shares of TSLA are up  just fractionally in premarket trading.  Technically, shares remain in a bullish state and continue to be one of the more bullish green stocks.  Currently, the stock appears to be carving out a double bottom base with good support around the 21 level.  In recent days, the stock made a key move getting back above resistance of the 50 and 200 day moving averages.