Tesla needs faster battery supply from Panasonic

Mae Love
April 14, 2019

The analyst maintained his stance that Tesla's battery costs were too high for the company to achieve its aggressive targets for ramping up volume, as the cost made the cars too pricey for consumers.

Separately, Panasonic said it was watching the demand situation in the electric auto market before making any further investments in expanding the capacity of the Nevada plant.

Tesla and Panasonic froze a plan to boost the capacity of the Gigafactory 1 battery factory in the USA state of Nevada "as concerns mount on Wall Street about weakening demand at Elon Musk's vehicle company", Nikkei Asian Review reported.

Tesla and Panasonic both have vested interest in the success of Gigafactory, the EV automaker's dedicated battery plant. Tesla further elaborated to Electrek that the company believes "there is far more output to be gained from improving existing production equipment than was previously estimated". Panasonic suspends investments plans in Shanghai plant Nikkei also claims that Panasonic is shifting plans for Tesla's Gigafactory that is being built at present outside of Shanghai. This would go up if their plan to expand the current 35 gigawatt-hours to 54 gigawatt-hours had pushed through.

Tesla's stock traded lower by 3.3 percent to $266.89 per share Thursday morning.

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Tesla drops almost 5% on the stock market on Thursday. Moreover, the article states that Panasonic intends to freeze its investments in Gigafactory 3 in Shanghai as well. "It helps the company reduce the influence of Tesla". "While Panasonic will be doing the actual manufacturing, Tesla will manage the site and assemble the cells into packs and modules".

In February, Tesla said it had agreed to buy United States energy storage company Maxwell Technologies Inc, sending shares in Panasonic lower.

Tesla Chief Executive Officer Elon Musk also said in November the US company would manufacture all its battery modules and packs at its new Shanghai factory and planned to diversify its sources.

The deal will enable Tesla to manufacture its batteries in-house at the Gigafactory that opened in 2016, instead of buying the batteries Panasonic makes in Japan and shipping them to the US. The plan is said to have the capability to produce more than 500,000 electric vehicles per year.

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