Tesla and Panasonic Manage to Make Giga Nevada Profitable and are Already Negotiating an Increase in Their Productive Capacity

For years, Panasonic has been Tesla’s sole provider of battery cells. The collaboration between the two companies has been so close that since 2014 they have jointly operated Giga Nevada, the largest battery factory in the world. However, in recent times there has been a gap between the two companies, with Tesla reaching parallel agreements with LG Chem and CATL for the supply of cells in the new factory of the brand on Chinese soil, Giga Shanghai. The fact that Tesla wants to produce its batteries in the short term has also been a point of disagreement with its Japanese partner.

However, now Tesla and Panasonic have announced that they have finally managed to make the production of cells in Giga Nevada profitable. News that apparently has improved the situation and has even led both companies to start negotiating an expansion in the productive capacity of the factory.

The chief financial officer of Panasonic, Hirokazu Umeda, confirmed last Monday that during the first quarter of 2020 (before having to close the facilities due to the coronavirus pandemic) the company achieved benefits from the production of cells in the North American factory. “We see strong demand for Tesla. We are in talks [to expand the factory’s capacity].”

Giga Nevada currently has a maximum annual capacity of 35 GWh. However, some sources assure that in the short term, this figure could be increased to 54 GWh. On the other hand, Umeda has also confirmed that Panasonic continues to work to improve the materials and technology of its cells for this year. Meaning we may see improvements in the batteries of the Model 3 and Model Y (the cells of the Model S and Model X do not come from Giga Nevada) in the short term.

These developments may be announced during the upcoming “Tesla Battery Day,” an event recently delayed to June in which Tesla will report on all its progress in the field of batteries. Although the most crucial announcement is expected to be regarding the start of the production of its self-developed cells, Tesla may take the opportunity to give details on the news regarding its agreements with Panasonic, LG Chem, and CATL.

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