Tesla Motors, the maker of high-performance electric vehicles, is working with Panasonic, the battery and consumer electronics giant, to develop its next generation of batteries. The partnership is intended to help Tesla lower the cost of its batteries and improve the range of its vehicles.

Last month Panasonic announced two high-energy batteries for electric vehicles. These new batteries store as much as 30 percent more energy than its previous lithium-ion batteries, and this increased storage could, in theory, increase a vehicle’s range by a similar amount, thereby addressing one of the main problems with electric cars. Tesla’s Roadster currently has a range of 244 miles and takes three and a half hours to charge with a special charger.

The other major challenge with electric vehicles is the cost of the battery packs. Tesla isn’t announcing the potential cost savings with future batteries, but JB Straubel, Tesla Motor’s chief technology officer, says battery costs have been steadily declining at about 8 percent a year.

Tesla plans to incorporate Panasonic’s cells into its battery packs, and will work with Panasonic to develop cells fine-tuned for use in cars, Straubel says. To do this, Tesla will draw on data gathered from the 1,000 cars it has made so far, which have been driven for over a million miles. Tesla currently gets its batteries from a variety of manufacturers.

Those driving Tesla cars won’t immediately see the added range from the new high-energy battery cells, Straubel says, since there is a lengthy process for validating the performance of new cells. What’s more, the actual range increases can vary. (For example, electronic controls keep a battery from completely discharging to help improve safety and reliability–complete discharges can harm some battery materials. The way the battery is controlled depends upon its chemistry and other details of the cell design.)

One of the new cells in particular will require extensive testing, since it relies on silicon-based electrodes. In theory, silicon electrodes can hold much more energy than the carbon electrodes they replace, but silicon electrodes tend to swell and break apart. They’ll need to be tested to make sure these problems have been overcome.

The approach Tesla is taking with Panasonic is different from that of other automakers, such as Nissan and General Motors, that are developing electric cars and plug-in hybrids (which run extensively on electric power). Tesla uses small cylindrical cells of the type used inside the battery packs in laptops and other consumer electronics, while the other automakers are turning to larger, flat battery cells developed specifically for use in cars. Straubel says that the fact that the manufacturing process for cylindrical cells is well-understood from many years of experience helps drive down costs and improve performance and reliability.

But flat batteries developed specifically for cars may ultimately prove better for electric vehicles, since they are designed to last longer, says Menahem Anderman, an automotive battery industry analyst. Also, because the flat batteries are larger, fewer cells are needed, reducing the number of things that can go wrong inside battery packs. Tesla uses thousands of cells, whereas other automakers can use just a couple hundred.

There’s also the question of safety. The new flat batteries typically use chemistries that are less volatile than those used in laptops, making it easier to ensure they don’t catch fire or explode. Indeed, the lithium-nickel chemistry that Panasonic uses in its high-energy cells can be even less stable than the materials in conventional laptop batteries. Tesla has worked around this by implementing special safety features inside its battery packs.

Straubel says that, for now, the manufacturing experience with cylindrical cells outweighs the potential advantages of flat cells, but as Tesla and Panasonic collaborate, they may eventually turn to flat cells.

Panasonic’s partnership with Tesla is part of a larger strategy to dominate the market for advanced automotive batteries. Panasonic is already a leading manufacturer of batteries for hybrid vehicles, which typically use nickel-metal hydride batteries. Together with Sanyo, a subsidiary it acquired at the end of last year, it provides nickel-metal hydride batteries to several major automakers, including Toyota, Honda, and Ford, and has an agreement to develop batteries for Volkswagen. In November, a joint venture between Toyota and Panasonic started manufacturing lithium-ion batteries for the plug-in hybrid version of the Toyota Prius.