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General Market Commentary
Exclusive: Tesla's battery maker suspends cobalt supplier amid sanctions concern
LONDON/TOKYO (Reuters) - Panasonic said it was unable to determine how much of the cobalt used in batteries it makes for Tesla cars comes from Cuba, a country subject to U.S. sanctions, and that it had suspended relations with a Canadian supplier as a result of its concerns.
The Japanese electronics giant, the exclusive supplier of batteries to Tesla, made the comments following questions from Reuters about whether the batteries contained Cuban cobalt.
Two sources familiar with the matter told Reuters that some of the cobalt that Panasonic uses to make Tesla’s batteries is mined in Cuba by Canadian supplier Sherritt International.
Panasonic said it was unable to tell how much cobalt sourced from Cuba via its Canadian supplier ended up in the batteries it provided to the U.S. market “due to co-mingling of sources by its suppliers in several phases of manufacturing processes”.
“Panasonic has chosen to suspend its relationship with its Canadian supplier,” a spokeswoman said, without naming the supplier. She added that Panasonic had used cobalt from the Canadian supplier for batteries used in the Tesla Model S and Model X, but only after February this year.
“Panasonic has sought guidance from the U.S. Treasury Department’s Office of Foreign Assets Controls (OFAC) regarding its interpretation of the scope of the U.S. ban on Cuban-origin imports,” she said.
The United States imposed sanctions on Cuba after Fidel Castro nationalized swathes of American assets more than 50 years ago.
Tesla, when asked for comment by Reuters, did not address questions about whether its batteries contained Cuban cobalt or whether that could potentially put the company in breach of sanctions.