Panasonic Increases Tesla Battery Investment
Earlier this week, the Nikkei Asian Review reported on Panasonic's plans to continue to invest in Tesla's Giga Nevada battery factory.
"Panasonic will boost production capacity of batteries for Tesla next year in an investment expected to exceed $100 million, Nikkei learned on Wednesday. The investment will be made in Gigafactory 1, a battery plant in the U.S. state of Nevada with 13 production lines. Panasonic will add another line, increasing capacity by 10% to 39 gigawatt-hours per year," wrote the publication.
In a separate article on Thursday, Bloomberg added more context, saying that earlier plans had been to reach about 35 gigawatt-hours of capacity in 2021, with the updated target now at 39 gigawatt-hours.
Panasonic has been encouraged by the demand for Tesla vehicles and the outlook for profitability on their business with Tesla.
"We have decided on the additional investment because we are now sure the business will be profitable based on the current market demand, our capacity and production efficiency. Demand for Tesla cars is clearly rising," Panasonic Executive Vice President Mototsugu Sato said Thursday, per Bloomberg.
The apparent decision for additional investment at Giga Nevada comes just two months after an updated agreement for battery cells was reached between Panasonic and Tesla.
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Disclosure: Rob Maurer is long TSLA stock and derivatives.