Panasonic, the exclusive supplier of batteries for Tesla electric vehicles, could have used cobalt from Cuba, which is subject to US sanctions, in their production. This was reported by Reuters, citing two interlocutors familiar with the matter.

Panasonic officials said they could not determine how much of the cobalt used to make Tesla's batteries came from Cuba because resources from different suppliers are shared at multiple stages of the production processes. As a result, the Japanese concern “has decided to suspend its relationship with its Canadian supplier,” Panasonic said, without specifying the name of the company. The supplier's cobalt was used for batteries used in the Tesla Model S and Model X, but only after February 2018, Panasonic admitted.

The agency's interlocutors note that the supplier of Cuban cobalt for Tesla was the Canadian Sherritt International. It owns 50% in a joint venture with the state-owned Cuban General Nickel Company, which produces cobalt at the Moa mine. Sherritt declined to comment on Panasonic's cobalt supplies.

In addition to Sherritt, Panasonic's cobalt is also supplied by Sumitomo Metal Mining, which produces most of its materials in the Philippines. Agency sources claim that Sumitomo accounts for the majority of supplies for the creation of rechargeable batteries.

Tesla said the company is “committed to achieving near-zero cobalt use in the near future.”

At the end of June, the head of Panasonic's automotive division, Yoshio Ito, stated that the sharp increase in Tesla Model 3 production had led to a shortage of batteries. At the same time, Tesla continues to increase production rates. At the end of June, the company reported production of 5,000 Model 3s per month, with a stated goal of 6,000 for July.

The company has been accused of inflating actual production volumes, as well as using defective batteries and reusing broken parts.

Reuters learned about the possible content of Cuban cobalt in Tesla batteries