Panasonic says reviewing further investment in Tesla Gigafactory

[TOKYO] Panasonic Corp is studying further investments in battery production at its Gigafactory venture with Tesla Inc, the company said, responding to a media report that the two companies had frozen previous plans.

Tesla, whose shares fell 3.3 per cent in trading before the bell in New York, said it would continue to invest in the Nevada plant as need be but believed more output could be gained from its existing resources than previously thought.

Giving no details of its sources, Japanese financial daily Nikkei reported  earlier on Thursday that financial issues had led the companies to rethink plans to expand the capacity of Gigafactory 1 by another 50 per cent next year.

The paper said the companies had already together invested US$4.5 billion in the facility and had been planning to expand the plant's capacity to the equivalent of 54 gigawatt hours a year in 2020, from 35 GWh at present.

"Panasonic established a battery production capacity of 35GWh in Tesla's Gigafactory 1 by the end of March 2019 in line with growing demand," Panasonic said.

"Watching the demand situation, Panasonic will study additional investments over 35GWh in collaboration with Tesla."

Neither company had made public detailed future development plans for the site, although Panasonic said  in July last year it would consider further investment in the Gigafactory if requested by the US electric carmaker.

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

"However, we think there is far more output to be gained from improving existing production equipment than was previously estimated."

Panasonic is the exclusive battery cell supplier for Tesla, which in turn is Panasonic's biggest EV battery client.

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

Chief Executive 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.

Lower-than-expected car deliveries by Tesla in the first quarter spooked stock and bond investors earlier this month, adding to Wall Street's concern about its future cashflow.

Tesla is expected to report first-quarter earnings on April 24.

REUTERS