Nikkei also reports that Panasonic has shifted strategies for the Gigafactory now being assembled outside Shanghai. Ground broke on its Chinese factory in January and plans to have creation up and running by the end of 2019, since it’s essential to the organization’s goal of becoming a significant presence in China.

This vertical integration, together with the huge scale Tesla planned to reach at the Gigafactory, has been designed to help decrease costs to a level”previously unobtainable in battery mobile and package production,” Tesla stated in its 2014 announcement. However, the the initial season of Model 3 generation was plagued with the slow pace and inconsistent excellent of battery (and battery pack) manufacturing. That led in the high production goals of Tesla.
But Tesla nor Panasonic has announced whether the battery manufacturer furnish or could make cells to the Shanghai factory or at. Tesla is allegedly in talks with two additional Chinese battery makers — Lishen and Contemporary Amperex Technology Co. Limited, or CATL — to supply cells into the Shanghai factory, however.

Tesla declared in 2014 that it signed a deal with Panasonic to deliver the battery manufacturer in house in the Gigafactory, which started in 2016. Rather than purchasing batteries and having them shipped across the world, the automaker wanted the cells to be manufactured inside precisely the same building where it planned to build the battery packs for its very first car, the Model 3.

The supply of batteries produced by Panasonic is still the”fundamental constraint” on the production of Tesla products, the company said Thursday. The electric car maker isn’t getting sufficient batteries which Panasonic operates Nevada Gigafactory to stay informed about the amount of cars and home energy . Both companies believe more batteries can be made though, Tesla said using the gear in place at the factory.

The battery maker advised Reuters that it is”[w]atching the demand situation,” and”will examine additional investments” beyond the current capacity of this Gigafactory.

Still, Nikkei reported Thursday the Panasonic will”suspend its planned investment in Tesla’s incorporated automotive battery and EV plant in Shanghai,” and instead”supply technical support and a small number of batteries in the Gigafactory.” No resources for all these plans were named in the report.
A Tesla spokesperson denied the report that Panasonic intends to”freeze” investment to the Nevada Gigafactory, stating that both companies”continue to invest substantial funds into Gigafactory.” They included that Tesla believes there’s”much more output to be obtained from improving existing production gear than was previously estimated.”
Now’s statement came as part of a reply to some pair of reports released by Nikkei Asian Review suggesting Panasonic is supposedly changing its plans for two of Tesla’s Gigafactories. Nikkei explained that Panasonic”froze” a decision to place an additional $900 million to $1.35 billion of investment to the Nevada Gigafactory in a bid to”decrease its reliance on the automaker.” Tesla is Panasonic’s largest customer for electric vehicle batteries, and also the Japanese battery manufacturer had already endured millions in losses on account of this slower-than-expected ramp-up of Model 3 production.

While the Model 3 finally became the best selling electric car in the world in 2018 despite the company’s struggles, Tesla saw a record drop in deliveries at the first quarter of 2019. The fall was partly attributable to how the company began shipping Model 3s into two new markets: China and Europe and turned its attention. However, some Wall Street analysts and skeptics of this company also believe that demand for the Model 3 has been drained in North America, in part because Tesla’s automobiles are no longer qualified for the full national EV tax charge, and because the long-promised $35,000 foundation version of the automobile still has not shipped.
The statement echoes what CEO Elon Musk told investors on a January 30th conference call, when he said that Tesla had been”cell-starved for automobile manufacturing,” and that it had to forgo some manufacturing of its home energy products so as to keep pace with Model 3 battery packs. And it shows that despite suffering through”production hell” and”delivery logistics hell,” one long-standing problem nonetheless steers the Model 3’s success: the tension between what Tesla needs and what Panasonic can provide.
Existing production lines that have been updated because the Gigafactory started in 2016 have been”seeing significant gains,” the spokesperson said. The spokesperson also said that this new focus on optimizing existing infrastructure wouldn’t affect Tesla’s strategies to triple the current dimensions of the Gigafactory.