BREAKING: Panasonic To Increase Gigafactory Cell Production More Than 30% By End Of 2018

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Panasonic is ramping up its 2170 cell production “more than 30%” at the Gigafactory by the end of 2018 in response to increased demand for Tesla’s Model 3, the Japanese publication Nikkan reports.

The report noted that to deliver the increased production, Panasonic will add three lithium-ion battery cell production lines, for a total of 13 lines in the Gigafactory. This is necessary for Panasonic to support Tesla’s demonstrated rate of 5,000 Model 3s per week.

In recent months, full production of the Model 3 has been blocked by various bottlenecks and has at times mandated that Gigafactory battery cell, module, and pack production be throttled as well so as not to exceed the battery requirements needed for the vehicles produced at Tesla’s Fremont factory as well as the Tesla Energy Powerwalls and Powerpacks produced at the Gigafactory.

Nikkan reports that in order to meet the burst rate of 5,000 Model 3s per week, Panasonic had to pull some creativity out of its manufacturing hat. “Panasonic was forced to respond, for example, to convert cells for household batteries etc. to Model 3.” That’s unheard of and surely cost the company a great deal of money, but when all eyes are on Model 3 production, there’s one thing you can be sure of — Elon is going to do everything he can to deliver on his promises.

The new production lines give Panasonic the ability to produce enough cells for current Tesla Model 3 demand without having to cannibalize any Tesla Energy products. They give Panasonic the ability to produce the full 35 GWh of cells it had initially estimated in order to support the expected Tesla Model 3 production rate of 5,000 per week — though, admittedly, this is happening nearly 1 year after it was supposed to happen based on earlier 2017 plans.

Tesla had initially expected the Gigafactory to have a total production capacity of 35 GWh at a total investment of $5 billion. However, after more detailed designs were completed, Tesla announced that it expected to far exceed these estimates, both in terms of production capacity and capital expenditure.

As a strategic partner in the Gigafactory operation, Panasonic’s share of the investment is around 30%, which buys it some skin in the game with Tesla as it ramps up production across the board to support the many customers waiting for their Model 3s, Powerwalls, etc. Panasonic could also be ramping up its commitment to be able to cooperate again with Tesla at the Tesla Gigafactory 3 in Shanghai, but this has yet to be confirmed. Regarding projects farther down the line that Panasonic may want to have a hand in, Tesla is reportedly in talks with Germany and the Netherlands about its fourth Gigafactory, which will service European markets.

The red-headed stepchild of the Tesla Gigafactory family is its second Gigafactory, which it acquired with the SolarCity deal. That Gigafactory was being called a Gigafactory before it even came into the fold with Tesla, but it was a solar factory back then. That factory is home to Tesla’s in-house solar panel and solar roof tile production, which it claims to be refocusing on this quarter, now that it has one foot out of Model 3 “production hell.”

Back on the battery side of things, Tesla has already publicly expressed a strong desire to achieve a stable production run rate of 10,000 Model 3s per week from the Fremont factory, which clearly requires more battery production lines at Gigafactory 1 in Sparks, Nevada. It seems everyone is watching Tesla (including bots and drones) as it attempts to ramp up Model 3 production yet again at its Fremont factory, ramp up battery cell production to 50 GWh at its Nevada Gigafactory, and break ground on two new Gigafactories on different continents … with some solar panels sprinkled on top just for fun.

Such growth is a tall order by any measure. It’s a challenge analysts will be combing over with a fine-tooth comb in advance of, during, and after Tesla’s shareholder call this Wednesday afternoon — that’s at 2:30pm Pacific time. Stay tuned to CleanTechnica for all the juicy bits as the news is broken.

Editor’s note: This article has been updated slightly after publishing to improve clarity.

Source: Nikkan via Twitter

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Kyle Field

I'm a tech geek passionately in search of actionable ways to reduce the negative impact my life has on the planet, save money and reduce stress. Live intentionally, make conscious decisions, love more, act responsibly, play. The more you know, the less you need. As an activist investor, Kyle owns long term holdings in Tesla, Lightning eMotors, Arcimoto, and SolarEdge.

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