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Tesla will start sales of its new Model S next year (Photo: Tesla)

Japan's Panasonic will provide lithium-ion battery cells for Tesla's new premium electric sedan, the Model S.

The Japanese electronics group said it would supply enough cells so Tesla can build more than 80,000 cars in the next four years. It also guaranteed that there would be enough cells for Tesla to build 6,000 Model S cars next year, its first year of production.

The Model S will be built from the ground up as an electric vehicle. It goes to market in mid-2012 in North America, and in Europe and Asia in late 2012.

Panasonic and the US-based electric-vehicle specialist first entered into a supply agreement in 2009. Their aim was to establish a multi-year cooperation to develop next-generation battery cells and thereby accelerate the growth of the electric-vehicle market. In 2010, Panasonic invested $30 million in Tesla.

Panasonic uses nickel-type cathode technology to make high-density battery cells. It has worked with Tesla specifically to optimize its battery cells for use in electric vehicles.

"Incorporating Panasonic's next-generation cells into Model S batteries will ensure unrivaled range and performance," said Elon Musk, co-founder and CEO of Tesla.

Masato Ito, President, Energy Company of Panasonic Corporation said his company will deliver "cells for EVs that can achieve longer range with large energy density."

In addition to electric sports cars, Tesla supplies batteries and powertrains to Toyota and Daimler.