Panasonic Says Tesla’s Model 3 Production Ramp Up Resulted in Battery Cell Shortages

A statement made by Panasonic has led to speculations that the firm's inability to keep up battery supply for Tesla's growing demands may have delayed the output of Model 3s.

A Panasonic executive revealed at its general shareholders' meeting on Thursday that Tesla's "sharp improvement in production" had led to occasional battery cell shortages. The company is Tesla's exclusive battery cell partner and is now being recognized as one of CEO Elon Musk's potential "bottleneck" issues discussed in his leaked email to employees.

Working on improving production

According to Reuters, the head of Panasonic's automotive business Yoshio Ito told the company's shareholders: "I wouldn't say the delay (in Tesla's Model 3 production) had no impact on our business, but we are in close communications with Tesla and working to steadily improve production." 

Elon Musk announced earlier this month that Tesla would achieve its 5,000 cars-per-week target by the end of June and later revealed in an email that that goal was suffering due to some "bottlenecks." 

Panasonic is also cooperating with Tesla on operating the battery Gigafactory in Nevada, as well as a plant for producing solar cells and modules in a new factory in Buffalo, New York. Reuters reported that the firm "sees batteries as central to its plan to boost automotive business revenue to 2.5 trillion yen by the year through March 2022 from 1.8 trillion yen ($16.3 billion)estimated for this financial year."

Invested in battery production

The firm also concluded a deal in December of last year with Toyota to explore a new battery partnership. The companies announced they would be launching a "feasibility study" that would investigate the potential of prismatic cell batteries to power electric cars.

"Toyota and Panasonic recognize the importance that further advancements in battery performance, price and safety, as well as a stable supply capacity, will have on encouraging further popularization of electrified vehicles. Both companies will consider details of the collaboration with the aim of achieving the best automotive prismatic battery in the industry and, ultimately, contributing to the popularization of Toyota's and other automakers' electrified vehicles," read the companies' joint statement.


However, at the shareholders meeting, Panasonic Chief Executive Kazuhiro Tsuga revealed that the more stable solid-state batteries would not hit the market for several years to come. "We believe we can continue to improve performance of today's lithium-ion batteries at least until around 2025," Tsuga said.

Tesla Gigafactory in Trouble Over Sudden Monopoly of Battery Supply

Tesla Gigafactory in Trouble Over Sudden Monopoly of Battery Supply

In the meantime, according to Tesla’s website, the firm's Gigafactory has a "planned production rate of 500,000 cars per year by 2018" that "will supply enough batteries to support Tesla’s projected vehicle demand." Musk also hopes the factory will help cut battery costs by “using economies of scale, innovative manufacturing, reduction of waste, and the simple optimization of locating most manufacturing process under one roof.”

Musk stipulates that, should the factory be fully operational by 2020, battery prices will be reduced by about 30% enabling the company to price its Model 3 vehicles in the $35,000 range.


"By reducing the cost of batteries, Tesla can make products available to more and more people, allowing us to make the biggest possible impact on transitioning the world to sustainable energy," reads the site.

Via: Reuters 

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