Energy
Tesla battery partner Panasonic debunks rumors about alleged Gigafactory 1 conflicts
Panasonic Corporation President Kazuhiro Tsuga effectively debunked speculations alleging that the Japanese company’s relationship with American electric car maker Tesla is on the rocks. During a recent Q&A session, Tsuga explained the dynamic between Tesla and Panasonic, as well as his insights about the idea of the electric car maker utilizing another battery supplier for Gigafactory 3.
The relationship between Tesla and Panasonic was thrown into question following a report from the Nikkei Asian Review last month, which alleged that the Japanese company was freezing its investments in Gigafactory 1. Tesla responded to the report, stating that there is far more output to be gained by improving the existing production lines in the Nevada-based factory. Elon Musk took to Twitter as well, stating that Panasonic’s lines at Gigafactory 1 are only operating at ~24 GWh per year despite having a theoretical capacity of 35 GWh.
Musk’s tweets were promptly interpreted as a “public battle” with Panasonic. Craig Irwin of Roth Capital Partners noted that “Tesla and Panasonic need couples counseling ASAP,” adding that “this is looking like a much more acrimonious relationship.” Tsuga, for his part, mentioned that Tesla and Panasonic maintain a “very good relationship between ourselves” during the Q&A session. Explaining further, the Panasonic President pointed out that the two companies have always been candid with each other, especially when it comes to investments in facilities such as Gigafactory 1.
“(In) the earlier session with the media, there was a question as to (whether) we have (a) bad relationship, (or if) we’re not getting along with Tesla. Well, we are making sure that we have a partnership relationship, not a supplier relationship. And since we are partners, we are very frank and candid and honest to each other. So on this battery business, as for the investment facilities — for the facilities that we have invested, can we maintain the battery operation with the orders coming in? From Tesla’s point of view, with the batteries being supplied, they can manufacture their vehicles on a full capacity basis.
“Unless that is established, this would not be a win-win relationship. In the past, what hurt us (was) that we were told that ‘This is the capacity you’ll need,’ but we couldn’t sell that much batteries. That’s the worst case. And that sense, Tesla is purchasing everything that we manufacture. And they have not just the electric vehicles but they do have the storage batteries as well, and they are asking for the capacity increase all the time. And therefore, we have capacity but not being produced. That situation is not envisioned for Gigafactory for now. So I think we have a very good relationship between ourselves,” Tsuga said.
Other concerns that were brought forward on the heels of the Nikkei report were Panasonic’s speculated issues about Tesla’s potential local battery partner in Gigafactory 3. Tesla is speculated to utilize a local battery supplier for the Shanghai-based electric car production facility, a strategy that analysts such as Cairn Energy Research Advisors managing director Sam Jaffe believed would irk Panasonic. “Tesla is starting to flirt with other battery makers in China, and Panasonic doesn’t like that,” Jaffe said in a statement to the Los Angeles Times.
Panasonic President Tsuga expressed a completely different sentiment about the topic, noting that it makes sense for Tesla to adopt a multiple supplier model for Gigafactory 3. “Now because of what happens in China, Tesla is considering a multiple supplier structure, which makes sense for Tesla maybe given the very special nature of doing business in China, and maybe they need to have that structure so as to be approved by China authority. So on the part of Tesla, they might prefer — they might start considering getting multiple suppliers, but that doesn’t mean that our relationship is being hurt and is being unstable, no. We continue to have very solid, very strong relationship with Tesla,” Tsuga said.
Panasonic and Tesla have been in a close working relationship for years. The Japanese company currently produces the battery cells for Tesla’s vehicles, from the 18650 cells used in the Model S and Model X to the 2170 cells utilized in the Model 3. Considering the recent statements of the Panasonic President, as well as Tesla’s ramp of its existing and upcoming products, it appears that the two companies’ partnership will likely remain strong for some time to come.
Energy
Tesla Energy celebrates one decade of sustainability
Tesla Energy has gone far since its early days, and it is now becoming a progressively bigger part of the company.
Tesla Energy recently celebrated its 10th anniversary with a dedicated video showcasing several of its milestones over the past decade.
Tesla Energy has gone far since its early days, and it is now becoming a progressively bigger part of the company.
Tesla Energy Early Days
When Elon Musk launched Tesla Energy in 2015, he noted that the business is a fundamental transformation of how the world works. To start, Tesla Energy offered the Powerwall, a 7 kWh/10 kWh home battery system, and the Powerpack, a grid-capable 100 kWh battery block that is designed for scalability. A few days after the products’ launch, Musk noted that Tesla had received 38,000 reservations for the Powerwall and 2,500 reservations for the Powerpack.
Tesla Energy’s beginnings would herald its quiet growth, with the company later announcing products like the Solar Roof tile, which is yet to be ramped, and the successor to the Powerwall, the 13.5 kWh Powerwall 2. In recent years, Tesla Energy also launched its Powerwall 3 home battery and the massive Megapack, a 3.9 MWh monster of a battery unit that has become the backbone for energy storage systems across the globe.
Key Milestones
As noted by Tesla Energy in its recent video, it has now established facilities that allow the company to manufacture 20,000 units of the Megapack every year, which should help grow the 23 GWh worth of Megapacks that have already been deployed globally.
The Powerwall remains a desirable home battery as well, with more than 850,000 units installed worldwide. These translate to 12 GWh of residential entry storage delivered to date. Just like the Megapack, Tesla is also ramping its production of the Powerwall, allowing the division to grow even more.
Tesla Energy’s Role
While Tesla Energy does not catch as much headlines as the company’s electric vehicle businesses, its contributions to the company’s bottom line have been growing. In the first quarter of 2025 alone, Tesla Energy deployed 10.4 GWh of energy storage products. Powerwall deployments also crossed 1 GWh in one quarter for the first time. As per Tesla in its Q1 2025 Update Letter, the gross margin for the Energy division has improved sequentially as well.
Tesla Energy shined in what was a weak delivery report for the first quarter, as the company’s frequently-forgotten battery storage products performed extraordinarily well.
Tesla reported its Q1 production, delivery, and deployment figures for the first quarter of the year, and while many were less-than-excited about the automotive side, the Energy division performed well with 10.4 GWh of energy storage products deployed during the first quarter.
This was a 156 percent increase year-over-year and the company’s second-best quarter in terms of energy deployments to date. Only Q4 2024 was better, as 11 GWh was recorded.
Tesla Energy is frequently forgotten and not talked about enough. The company has continued to deploy massive energy storage projects across the globe, and as it recorded 31.5 GWh of deployments last year, 2025 is already looking as if it will be a record-setting year if it continues at this pace.
Tesla Megapacks to back one of Europe’s largest energy storage sites
Although Energy performed well, many investors are privy to that of the automotive division’s performance, which is where some concern lies. Tesla had a weak quarter for deliveries, missing Wall Street estimates by a considerable margin.
There are two very likely reasons as to why this happened: the first is Tesla’s switchover to the new Model Y at its production facilities across the globe. Tesla said it lost “several weeks” of production due to the updating of manufacturing lines as it rolled out a new version of its all-electric crossover.
Secondly, Tesla could be facing some pressure from pushback against the brand, which is what many analysts will say. Despite the publicity of attacks on Tesla drivers and their vehicles, as well as the company’s showrooms, it would be safe to assume that we will have a better picture painted of what the issue is in Q2 after the company reports numbers in July.
If Tesla is still struggling with lackluster delivery figures in Q2 after the Model Y is ramped and deliveries are more predictable and consistent, we could see where the argument for brand damage is legitimate. However, we are more prone to believe the Model Y, which accounts for most of Tesla’s sales, and its production ramp is likely the cause for what happened in Q1.
In what was a relatively bleak quarter, Tesla Energy still shines as the bright spot for the quarter.
Tesla has chosen the location of its latest manufacturing project, a facility that will churn out the Megapack, a large-scale energy storage system for solar energy projects. It has chosen Waller County, Texas, as the location of the new plant, according to a Commissioners Court meeting that occurred on Wednesday, March 5.
Around midday, members of the Waller County Commissioners Court approved a tax abatement agreement that will bring Tesla to its area, along with an estimated 1,500 jobs. The plant will be located at the Empire West Industrial Park in the Brookshire part of town.
Brookshire also plans to consider a tax abatement for Tesla at its meeting next Thursday.
The project will see a one million square-foot building make way for Tesla to build Megapack battery storage units, according to Covering Katy News, which first reported on the company’s intention to build a plant for its energy product.
CEO Elon Musk confirmed on the company’s Q4 2024 Earnings Call in late January that it had officially started building its third Megapack plant, but did not disclose any location:
“So, we have our second factory, which is in Shanghai, that’s starting operation, and we’re building a third factory. So, we’re trying to ramp output of the stationary battery storage as quickly as possible.”
Tesla plans third Megafactory after breaking energy records in 2024
The Megapack has been a high-demand item as more energy storage projects have started developing. Across the globe, regions are looking for ways to avert the loss of power in the event of a natural disaster or simple power outage.
This is where Megapack comes in, as it stores energy and keeps the lights on when the main grid is unable to provide electricity.
Vince Yokom of the Waller County Economic Development Partnership, commented on Tesla’s planned Megapack facility:
“I want to thank Tesla for investing in Waller County and Brookshire. This will be a state-of-the-art manufacturing facility for their Megapack product. It is a powerful battery unit that provides energy storage and support to help stabilize the grid and prevent outages.”
Tesla has had a lease on the building where it will manufacture the Megapacks since October 2021. However, it was occupied by a third-party logistics company that handled the company’s car parts.
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