Tesla partner Panasonic suggests Model 3 production “will rise sharply”

Panasonic CEO Kazuhiro Tsuga provided clues on what might be causing Tesla’s Model 3 production bottleneck. Tsuga said during Panasonic’s earnings call on Tuesday that battery production at the Gigafactory had seen some delays, but the company expects to begin automation soon. The comment comes one day before Tesla is scheduled to report its Q3 earnings on Wednesday, November 1 after the closing bell.

“This process (for battery packs) will be soon automated, and then the number of vehicles to be produced will rise sharply,” said Tsuga as first reported by Reuters. This is the first time we’re hearing Tesla’s main battery supplier and production partner acknowledge that battery production at the Gigafactory may not have been automated in prior months.

Though Tsuga did not explicitly comment on whether this was related to Tesla’s newest mass market sedan, it’s presumed that he was referring to automation of Model 3’s 2170 li-ion battery cell and pack production at the Gigafactory. After all, Panasonic has already been mass producing the older form factor 18650 cells for Model S and Model X for quite some time so any production challenges would have surfaced in the past. Timing for Tsuga’s announcement combined with recent scrutiny over Tesla’s hand-building of major Model 3 components, suggests that he was referring to automation of Model 3 battery production.

Panasonic’s increasing investment in the electric vehicle industry as it aims to become the world’s leading auto supplier bodes well for Tesla who’s looking to produce as many as 500k of its all-electric vehicles by the end of 2018. Thirty percent of Panasonic’s 2017 battery sales were to Tesla, which has become a major focal point for the company’s long term growth strategy.

“We are now ready for a major turnaround,” said Yoshio Ito, executive vice president of Panasonic’s Automotive & Industrial Systems Co. “Our understanding of this market is that it is very promising in terms of growth.” In addition to producing batteries, Panasonic also believes that it has approximately 40 percent of the automotive relays market. Relays, or electronically operated switches, are major components used in an electric vehicle’s drivetrain control system and onboard communications.

Panasonic expects to double its automotive sales to approximately $21.91 billion by 2022.

The post Tesla partner Panasonic suggests Model 3 production “will rise sharply” appeared first on TESLARATI.com.