Panasonic studying further investment in battery production at Tesla's gigafactory

ReutersApr 11, 2019 16:03:03 IST

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

A Panasonic Corp's lithium-ion battery, which is part of Tesla Motor Inc's Model S and Model X. Reuters

Giving no details of its sources, Nikkei reported earlier on Thursday that financial issues had led Tesla and Panasonic to rethink plans to expand the capacity of Gigafactory 1 by another 50 percent next year, having invested $4.5 billion in the plant.

In January Tesla Inc has signed a preliminary agreement with China’s Tianjin Lishen to supply batteries for its new Shanghai car factory, to cut its reliance on Japan’s Panasonic, two sources with direct knowledge of the matter had said.

The companies had yet to reach a decision on how large an order the US electric car company would place, and Lishen was still working out what battery cell size Tesla would require, one of the sources said.

While Panasonic is currently Tesla’s exclusive battery cell supplier, Tesla Chief Executive Elon Musk said in November the U.S. company would manufacture all its battery modules and packs at the Shanghai factory and planned to diversify its sources.