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Financial news from US stocks: According to Tesla employees, Tesla is developing methods to produce its own batteries. Tesla has relied on Panasonic to supply batteries since Tesla and Panasonic signed a broad cooperation agreement in 2014.
The move could help Tesla offer cheaper, higher-performance electric vehicles than it currently can without having to pay or share data and resources with outside suppliers or partners. According to research by IHSMarkit, batteries are the main cost component of electric vehicles.
CEO Elon Musk admitted at the company's annual shareholder meeting earlier in June that the company had been "battery constrained" in the past. This means that the lack of batteries limits the production and sales of Tesla's electric vehicles and energy storage systems.
Making its own batteries would also fit in with Musk's overall goal of making Tesla as "vertically integrated" as possible, meaning it develops, manufactures and sells everything possible - including its own enterprise software.
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But producing batteries in high volumes will be another challenge for a company that has recently implemented cost-cutting measures and is still trying to perfect its high-volume vehicle production.
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