With Model 3 production steadily increasing as Tesla confirmed today, Gigafactory 1 in Nevada, where Tesla and Panasonic produce the batteries for the vehicle, is going to need to keep up with the production of the critical EV component.

Panasonic now says that it is open to increasing its already large investment in Tesla Gigafactory 1 in order to support the growth.

The project, which started in 2013, has already grown into the biggest battery factory in the world with an annual production capacity of over 20 GWh.

But they need to more than double that over the next year alone in order to support Tesla’s ambitions.

Tesla spent $173.3 million on Gigafactory 1 construction during the first quarter of the year alone.

The total investment into the factory between Tesla and its partners have already exceeded $4 billion and Panasonic is contributing over $1 billion to funding the plant.

The head of Panasonic said today that he would consider investing more if Tesla wanted to increase the capacity (via Reuters):

“We would of course consider additional investment if we are requested to do so,” Yoshio Ito, chief of Panasonic’s automotive business, said at a media roundtable, responding to a question about the possibility of further investment, given the chance.

The comment comes after Panasonic battery cell production at Gigafactory 1 emerged as a possible bottleneck in the Model 3 production ramp up.

Last week, Yoshio Ito said that the recent Tesla Model 3’s production ramp is creating ‘occasional battery cell shortages’.

It came as a surprise because most of the bottlenecks in Tesla’s production ramp had been on the automaker’s side up until that point.

Panasonic is still hiring for its side of the factory in Nevada as it increases its production capacity.

The Japanese electronics giant is the sole battery cell supplier for Tesla’s vehicles. It manufactures custom 18650 li-ion cells in Japan for Tesla’s Model S and Model X vehicles. The Model 3 cells are custom 2170 li-ion cells co-developed with Tesla and manufactured by Panasonic at Gigafactory 1.

About the Author