Tesla, Panasonic to seek productivity gains before new battery investments

Andrew Cummings
April 14, 2019

Panasonic has not made announcements about partnering with Tesla in Shanghai.

The news represents a real reversal of Panasonic's plans; it recently expanded the US Gigafactory from 10 to 13 production lines to help the auto maker grow.

However, Tesla has denied this report, claiming that both Panasonic and Tesla continue to invest substantial funds into the Gigafactory.

Panasonic is the sole supplier of lithium-ion battery cells for Tesla vehicles, and a slowdown in production would indicate a significant lack of confidence in the United States firm's trading.

Still, the news gained traction fast, after all, Nikkei is usually well-informed, and so Panasonic sent a reply: "Panasonic established a battery production capacity of 35 GWh in Tesla's Gigafactory 1 by the end of March 2019 in line with growing demand".

"A Tesla representative told Nikkei that the companies will "[.] continue to make new investments in Gigafactory 1, as needed". In July 2018, Panasonic merely stated that further investments in the Gigafactory would be considered if Tesla so wished. Panasonic also produces solar cells for the company's solar roof panels.

The report concerned investors because it could impact Tesla's production and delivery rates. Panasonic has said it will study further expansion of the Nevada plant and that it was considering possibilities for the Shanghai plant. Tesla and Panasonic initially planned to raise capacity at the facility by 50 percent by 2020, according to Nikki Asian Review.

This deal was meant to reduce battery production costs to levels "previously unobtainable in battery cell and pack production".

Panasonic President Kazuhiro Tsuga's bet on Tesla has also been a source of concern as the carmaker went through what Musk called "production hell" ramping up output of the Model 3 previous year.

In January, the Toyota Motor Corporation and Panasonic announced a new joint venture to develop advanced automotive prismatic batteries for use in Toyota electric vehicles.

Tesla shares have dropped in recent weeks, falling by almost five percent to $263.20 per share in pre-market trading in the United States. Tesla is expected to report first-quarter earnings on April 24, this is expected to be a key report for the company.

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