December 30, 2019

Panasonic has had difficulties ramping up production of battery cells at Gigafactory 1 to support Tesla, but the company now says that it would be able to ramp up battery production to 54 GWh.

The growth of Gigafactory 1 in Nevada has been impressive and the factory quickly became the largest li-ion battery factory in the world, but earlier this year, Tesla said that Panasonic’s battery cell production was limiting Model 3 production.

Initially, Panasonic invested $1.6 billion in the factory to reach a battery cell production capacity of 35 GWh.

The company had issues reaching the target and according to recent reports, the Tesla-Panasonic relationship has hit hard times as Tesla is making moves to make its own batteries.

They were supposed to keep growing the factory, which Tesla said could eventually produce up to 105 GWh of battery cells and 150 GWh of battery packs in order to support Tesla’s growing business.

With Tesla making moves to produce its own batteries and Panasonic having a hard time ramping up, these plans for expansions have reportedly been put on hold.

But Panasonic could be ready to grow again at the Tesla Gigafactory 1.

The company now says that one of their biggest hurdles was finding workers, but they said that they have now fixed the hiring problem.

Financial Times reported after an interview with Panasonic:

“To build its team, Panasonic recruited chemical engineers from non-battery sectors and trained them to handle lithium-ion batteries. Now it has 3,000 people who operate the machinery and about 200 technical assistants from Japan to keep the plant running 24 hours a day, 365 days a year.”

Allan Swan, the head of Panasonic’s US battery manufacturing unit based inside Tesla Gigafactory 1, said that they could now ramp up to 54 GWh:

“For us to move to [54GWh] should not be so hard. We now have the knowhow to do it in quite a high volume environment,”

However, in order to do that, Tesla and Panasonic might have to agree on a new investment and sale contract for Tesla to buy the cells.

This might be more difficult in the new context.

Electrek’s Take

A jump from 35 GWh to 54 GWh would be significant. At an average battery pack size of 60 kWh, that’s over 300,000 more vehicles per year.

Tesla needs that new capacity for the Model Y production that is about to come online.

Even though everything points to Tesla gong to make its own batteries in the near future, I believe the automaker will make a deal with Panasonic to keep expanding at Gigafactory 1.

Tesla needs more capacity fast and Panasonic is probably their best shot at it.

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