Panasonic, Tesla’s sole battery cell partner for its electric vehicles, was never seen as a bottleneck in the ramp up of Model 3 production, but the Japanese electronics giant has now admitted that the recent “sharp improvement in production” has led to “occasional battery cell shortages”.

Yoshio Ito, head of Panasonic’s automotive business, made the comment during the company’s general shareholders meeting on Thursday.

Ito added (via Reuters):

“I wouldn’t say the delay (in Tesla’s Model 3 production) had no impact on our business, but we are in close communications with Tesla and working to steadily improve production,”

The “sharp improvement in production” could be in reference to Tesla fixing its production bottleneck in battery module production at Gigafactory 1, where Panasonic is building the battery cells for the Model 3, which Tesla then use in battery modules and packs.

In an email to employees earlier this month, CEO Elon Musk laid out a few specific areas that still represent bottlenecks for Tesla to achieve its 5,000 units per week target.

He said that all areas are producing at over 3,500 units per week, but he added the paint shop, General Assembly line 3, General Assembly line 4, End of Line, and Module Zone 4 at Gigafactory 1 all need “radical improvements.”

Earlier this week, a Gigafactory 1 employee said that Tesla fixed the bottleneck and achieved an output of over 5,000 units per week.

Tesla CEO Elon Musk recently said that Gigafactory 1 has become the largest battery factory in world – without confirming the actual output.

At 5,000 Model 3 battery pack per week, it’s around 375 MWh of battery production and almost 20 GWh of annual production if they can maintain it. That’s without accounting for Powerwall and Powerpack production.

But it’s just starting to ramp up according to the company. Tesla aims to eventually have Panasonic produce 105 GWh of battery cells at Gigafactory 1 and have a total battery pack output of 150 GWh – with the difference being compensated by battery cells imported from suppliers, including Panasonic’s other factories.

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