Tesla partner Panasonic suggests Model 3 production “will rise sharply”
October 31, 2017  Gene


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

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

“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 ...
Production problems at Tesla/Panasonic Gigafactory may be at an end
10/31/2017  Jonathan M. Gitlin

Tesla's new supercharger in Arlington, Texas

The comment was made by Panasonic's CEO the day before Tesla's Q3 earnings

Tesla's Model 3 production bottleneck is "now understood," according to
Panasonic CEO Kazuhiro Tsuga. Reuters reported on Tuesday that Tsuga, whose
company jointly operates a Gigafactory in Sparks, Nevada, with Tesla, told
an earnings call that battery production output "could soon be increased."
His comments, which come the day before partner Tesla reports its own 2017
Q3 earnings, provided yet another small insight into the "production hell"
that has beset the electric vehicle manufacturer as it tries to enter the
world of mass production.

Earlier this month, The Wall Street Journal claimed that the 260-odd Model
3s delivered up to that point had "major portions" built by hand, a charge
that Tesla strenuously denied. Although WSJ and others have been pointing to
problems with the "body in white" of the Model 3—the mix of aluminum and
steel that sits atop the skateboard chassis which will eventually be built
by what Elon Musk has previously called an "alien dreadnaught"—from the
sounds of things, battery pack production hasn't been quite that simple

"This process (for battery packs) will be soon automated, and then the
number of vehicles to be produced will rise sharply," Tsuga told reporters.
That indicates that until now, the battery pack production hasn't been
automated at the Gigafactory. Obviously, such a process needs to be
automated for Tesla to realize its goal of producing 20,000 Model 3s a

Historically, Tesla has often reported good news in Q3, helped by mid-year
bumps in production and sales of emissions credits. Despite the ongoing
problems with the Model 3, Model S and Model X deliveries have gone well for
Tesla, and the message from battery partner Panasonic that things are
getting better may help placate investors during the earnings call on
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