Tesla is quietly developing its own EV battery cells

Shh, don't tell Panasonic.

Tesla has powered its electric cars using Panasonic's battery cells for years, but it may ready for a greater degree of independence going forward. Employees talking to CNBC claim that Tesla is developing its own "advanced" lithium-ion battery cells as well as the processes to manufacture them at scale. The company reportedly conducts some of its research at a "skunkworks" facility minutes away from its Fremont plant.

It's not hard to divine the reasoning behind the move. In-house cells would let Tesla optimize its battery packs for its cars, whether it's longer range, more acceleration or better sustained performance. This could also cut costs by eliminating go-betweens like Panasonic, making that $25,000 EV more feasible.

Moreover, it might provide a failsafe in case the relationship between Tesla and Panasonic goes south. The Japanese firm recently froze its investments in Tesla's Gigafactories, however temporarily, and it recently reached an agreement with Toyota to make car batteries. Elon Musk also blamed Panasonic for serving as a "constraint" on Model 3 production. Internally-designed cells could ensure that Tesla isn't held back and, as technology VP Drew Baglino put it, make the company the "masters of our own destiny."

This doesn't mean Tesla is about to drop Panasonic completely. It still needs its partner in the short term, and Panasonic's capacity might be crucial as Tesla expands its reach. Panasonic might just want to have a backup plan in case it's no longer the center of Tesla's universe.

Presenter: Dana Wollman
Script: Terrence O'Brien
Script Editor: Dana Wollman
Editor: Kyle Maack
Producer/Camera: Michael Morris

This article contains affiliate links; if you click such a link and make a purchase, we may earn a commission.