Nikkei suggested yesterday, that Panasonic and Tesla’s plans to increase production capacity for battery cells at Gigafactory 1 have been put on ice due to financial problems at Tesla and uncertainties about future demand. While us and others could but wonder, Panasonic now took a stand that is ambivalent.
The report in the Japanese business paper Nikkei did not refer to sources but claimed that the planned expansion at Gigafactory 1 was on hold. Moreover, the article states that Panasonic intends to freeze its investments in Gigafactory 3 in Shanghai as well. This seemed to confirm reading the report as potentially misguided because we had heard for the first time of involvement of Panasonic at Tesla’s China Gigafactory. There had been rumours of course but so far they remain unconfirmed. As far as cell supply to Tesla’s China plant in Shanghai is concerned, Panasonic had officially stated at the beginning of February that no decision had yet been made. What is certain is that Tesla intends to procure cells from several suppliers in China. Rumours have it that Lishen is one of the candidates.
Still, the news gained traction fast, after all, Nikkei is usually well-informed, and so Panasonic sent a reply: “Panasonic established a battery production capacity of 35 GWh in Tesla’s Gigafactory 1 by the end of March 2019 in line with growing demand. Watching the demand situation, Panasonic will study additional investments over 35GWh in collaboration with Tesla.” This neither marks a denial nor a confirmation of the Nikkei report but suggests that involvement will depend on demand.
Fact is, that neither Tesla nor Panasonic have put detailed future plans for the Nevada location on the table so far. In July 2018, Panasonic merely stated that further investments in the Gigafactory would be considered if Tesla so wished. Nikkei also quoted from a Tesla statement: “Both Tesla and Panasonic continue to invest substantial funds into Gigafactory. That said, we do believe there is far more output to be gained from improving existing production equipment than was previously estimated.”
The paper added some more detail saying that Panasonic originally intended to invest an additional 100 to 150 billion yen (900 million to 1.35 billion dollars) in Gigafactory 1 and says the aim was to increase capacity by 50 percent from 35 to 54 GWh. All this is now said to be over. Together, Tesla and Panasonic are said to have invested 4.5 billion US dollars in the plant in recent years.
Additional reporting by Nora Manthey.