Tesla, Panasonic halt Gigafactory expansion amid sagging vehicle demand

Lloyd Doyle
April 14, 2019

Hundreds of global suppliers are working behind the scenes to supply the components to assemble a Tesla vehicle. The Tesla deal with PanasonicThe deal was announced in July of 2014 as reported in a Verge article: "Electric auto manufacturer Tesla has today announced a partnership with Japanese electronics giant Panasonic to build a large battery manufacturing plant on U.S. soil".

"We will, of course, continue to make new investments in Gigafactory 1, as needed", the Tesla spokesperson said in the follow-up statement.

Japan's Nikkei Asian Review reports that the battery maker, which partnered with Tesla on the automaker's Nevada Gigafactory 1, has grown cold feet. 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. Tesla's recent deliveries miss has prompted analysts, including at Goldman Sachs, to lower estimates for 2019. That said, we believe there is far more output to be gained from improving existing production equipment than was previously estimated.

Gigafactory 1, the site in Nevada, is a joint venture with $4.5 billion behind it to date.

Panasonic is the sole supplier of lithium-ion battery cells for Tesla vehicles, and a slowdown in production would indicate a significant lack of confidence in the USA firm's trading.

Gigafactory 1 is a massive Dollars 4.5 Billion facility near Reno, Nevada where Tesla and Panasonic jointly manufacture battery packs for Tesla's vehicles and energy storage products.

Panasonic commented on the decision stating: "Panasonic will study additional investments over 35 GWh in collaboration with Tesla". The report claimed that Panasonic wanted to reduce its dependence on Tesla.

Company results have also been up and down. The company had reiterated its annual delivery forecast of 360,000 to 400,000 cars earlier this month.

The paper added some more detail saying that Panasonic originally meant 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.

Other reports by Iphone Fresh

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