Tesla’s Gigafactory Nevada could be expanding soon as the electric car maker is experiencing more demand for its battery-powered cars and energy storage products.
“We are seeing strong demand from Tesla,” Panasonic Chief Financial Officer Hirokazu Umeda said during an earnings briefing on Monday, May 18.
As far as the plans to expand the facility, Umeda said, “We are in discussions right now.”
Interestingly enough, Panasonic has lost its status as Tesla’s exclusive battery supplier after the electric car maker chose to use LG Chem cells for its China-made Model 3 that are produced at Gigafactory Shanghai. The two companies also ended their partnership at Gigafactory New York, which is where Tesla manufactures its solar products.
However, it appears that Panasonic and Tesla’s partnership in Gigafactory Nevada is strong, contrary to common bearish arguments. So strong that its current capacity of 35 gigawatt-hours per year is proving to be insufficient as Tesla’s vehicles are becoming more popular.
Umeda detailed his company’s current relationship with Tesla, stating that the two had been working on new developments for the remainder of 2020. “We will be working to improve materials and technologies throughout this financial year,” Umeda remarked.
During the Q1 2020 Earnings Call and Update Letter, Tesla posted its third consecutive quarterly profit. The increase in the electric automaker’s valuation was somewhat unexpected as Tesla was taking hits in production due to the COVID-19 pandemic.
A government-mandated closure of Gigafactory Shanghai was implemented during the onset of the pandemic in China, though the facility was able to reopen on February 10. Meanwhile, the company’s Fremont facility in Northern California, Gigafactory New York, and Gigafactory Nevada all remained closed for over a month.
Even though Tesla’s facilities were closed for a portion of Q1, Tesla managed to turn a profit. As per Panasonic’s recent earnings briefing, this was the second consecutive quarter that its battery venture with Tesla at Gigafactory Nevada turned a profit as well.
Ultimately, Tesla’s battery business managed to give Panasonic’s recent earnings report a silver lining, despite the operating profit of the Japanese consumer electronics firm dropping 29%. Panasonic was subjected to plant closures and supply chain disruptions for many of its products, including laptops and washing machines, and factory equipment, due to the pandemic.