Panasonic in talks with Tesla to increase investment at Gigafactory 1 beyond 35 GWh of production

Panasonic is currently deploying new production lines at Tesla Gigafactory 1 to get to 35 GWh of battery cell production by the end of the year.

Now the battery manufacturing says that it is in talks with Tesla to increase its investment at Gigafactory 1 to push the production beyond 35 GWh.

The Japanese electronics giant reported its latest financial results and its operating profits were down, which they blamed on their costs at Gigafactory 1 to ramp up production.

Nonetheless, they expect that it will start paying off and they confirmed that they are in talks with Tesla to further increase their investment.

Panasonic CEO Kazuhiro Tsuga commented (via Reuters):

“Investment for capacity beyond 35 GWh means that Tesla would also need to make substantial investment in vehicle production, so we will closely align with each other,”

35 GWh was Tesla’s original target for battery cell production at Gigafactory 1, but it later updated the planned capacity, which the automaker thinks could reach 105 GWh after several expansions.

The factory’s structure is currently only about 30% of its planned final form.

Tesla is also accelerating its plan to build Gigafactory 3 in China, which is expected to eventually include battery cell production.

Tsuga was asked if they plan to invest in the project, but the CEO said that they “will put the priority on building additional capacity at the Gigafactory over China”.

The CEO was also asked if he has any problem with Tesla CEO Elon Musk’s “erratic behavior”. Tsuga said:

“Though Elon’s comments are unpredictable, we will continue to monitor Tesla’s operations to ensure no chaos there and will work in step with the company. […] But I don’t see the U.S. electric car maker’s business operations have been put into chaos.”

Tesla has now been consistently making close to 5,000 Model 3 vehicles per week.

The automaker has been more shy about predicting its ramp up to 10,000 units per week, but it plans to achieve the milestone at some point next year.

Electrek’s Take

35 GWh of battery cell production will get them close to that, but they will need more cells to get all the way there.

It also depends on the share of cells going to Tesla Energy, but the company said that it was open to going to other suppliers for those if needed.

Either way, they should work on closing the new investment schedule with Panasonic as soon as possible.

We have been saying it for a while now, but securing battery cell supply is the most important thing in ramping up volume production of electric vehicles.