(Corrects a report from Oct. 31 that incorrectly stated how many new vehicles were sold in the U.S. last year and Tesla's market share.)
NEW YORK ( TheStreet) -- Tesla Motors ( TSLA) continues its production growth in high gear. Sales of the all-electric vehicles are selling as fast as they come off the production line. According to the company, sales would be even higher if it wasn't for part suppliers creating a sales speed bump from lack of part production capability.
Tesla is working feverishly to source enough components to reach its goal of doubling production by the end of next year. This includes batteries produced by Panasonic, which all electric vehicles need to power their hungry motors.
The current two-year-old contract calls for Panasonic to provide enough batteries to power about 80,000 vehicles over the course of four years. For a company expected to exceed 21,000 vehicle deliveries this year and a desire to drive past 40,000, the current battery contract wasn't nearly enough.
On Wednesday, the companies announced an agreement to raise the number of battery cells to nearly two billion. Current production uses about 6,000 to 8,000 cells per vehicle, resulting in a capacity of, give or take, about 300,000 vehicles. The Street's Chris Ciaccia describes the latest agreement between Panasonic and the California automaker that initially sent shares of Tesla higher.
It sounds impressive at the surface level, but there's a reason why shares of General Motors (GM), Ford (F) and Toyota Motors (TM) made a collective yawn while shares in Tesla quickly gave back gains. An increase to only 100,000 vehicles represents relatively poor performance in relation to the stock's appreciation.