Meaning
Contractual clauses in battery assembly agreements transfer the performance and defect guarantees of the individual cells directly from the cell maker to the end customer. A pass-through warranty ensures that the pack builder is not financially liable for defects inherent to the raw cells they purchased and assembled. This transfer shifts the liability to the primary cell manufacturer who has control over the chemistry.
It protects the middle-tier integrator from expensive product recalls.
Risk Allocation
Integrators negotiate this pass-through warranty to align their liability with their actual work scope, which is module and pack assembly. If a cell fails due to an internal manufacturing defect, the end customer claims damages directly from the cell supplier. This protects the integrator’s narrow profit margins from being wiped out by battery cell recalls.
Commercial Sourcing
Sourcing contracts for high-volume automotive packs must align the cell warranties with the vehicle warranties. Buyers must ensure that the pass-through terms are accepted by both the cell manufacturer and the automotive brand. This negotiation is a complex part of high-voltage system purchasing.
Sourcing Limitation
These warranties only apply if the pack builder has operated the cells within the specified voltage and temperature limits. Any deviation voids the coverage.
