Tesla Gigafactory 1 to boost battery production capacity 10% after new $100 million panasonic investment

Growing Tesla sales warrant new investments for the battery maker's biggest customer.

| More on:
Black Tesla electric car driving on a road at dusk

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Panasonic (OTC: PCRFY) will be investing over $100 million in Tesla's (NASDAQ: TSLA) Gigafactory 1 plant in Nevada to boost battery production capacity by 10% to 39 gigawatt-hours (GWh) per year.

The factory is part of Tesla's critical infrastructure producing electric motors and battery packs for the Model 3 and Model Y electric vehicles. While both companies have wanted to boost production for some time, their relationship has at times been strained, though higher Tesla sales seems to have cleared that up.

On the road to expansion

According to Nikkei Asian Review, Panasonic will add one more production line to the 13 already operating at the factory, which currently produces 35 GWh of lithium-ion battery cells per year.

The two companies have wanted to boost production to as high as 54 GWh annually, but in April 2019, Panasonic said it first wanted to see if demand for electric vehicles warranted new investments.

Tesla is Panasonic's largest battery cell customer, but it also acquired Maxwell Technologies last year to help make more efficient batteries, and CEO Elon Musk rankled Panasonic by tweeting Model 3 production was being held up by constraints in its partner's battery output.

A recent Science Channel video indicated the Gigafactory was producing 13 million lithium-ion battery cells a day, which suggests 80 gigawatt hours a year, but Panasonic denies it's producing so much and Musk's earlier tweet would also suggest otherwise.

Panasonic invested $1.6 billion in the advanced battery factory for it to achieve the 35 GWh of battery cell production capacity. With Tesla now on track to produce 1 million electric vehicles or more a year next year, boosting battery production at Gigafactory 1 now makes sense. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on International Stock News

Four investors stand in a line holding cash fanned in their hands with thoughtful looks on their faces.
Economy

Up 20% this year. Does the S&P 500 Index have more in the tank for 2024?

Will US stocks hold up after the election?

Read more »

two young boys dressed in business suits and wearing spectacles look at each other in rapture with wide open mouths and holding large fans of banknotes with other banknotes, coins and a piggybank on the table in front of them and a bag of cash at the side.
International Stock News

2 magnificent S&P 500 dividend stocks down 27% to 51% to buy and hold forever

These stocks hold potential to act as growth and income plays.

Read more »

A young female investor with brown curly hair and wearing a yellow top and glasses sits at her desk using her calculator to work out how much her ASX dividend shares will pay this year
International Stock News

One Wall Street analyst thinks this emerging Artificial Intelligence stock could rise 60% in the next year

SoundHound AI is on the doorstep of a big year.

Read more »

man looks up at apple on his head
International Stock News

Why did Warren Buffett sell more Apple shares?

Does Buffett know something we don't?

Read more »

A male party goer sits wearing a party hat and with a party blower in his mouth amid a bunch of balloons with a sad, serious look on his face as though the party is over or a celebration has fallen flat.
International Stock News

What snapped the S&P 500 winning streak last night?

The S&P 500 almost made October a winner, but fell at the final hurdle.

Read more »

Man going down a red arrow, symbolising a sliding share price.
International Stock News

Why Nvidia stock is sinking today

Investors were spooked by economic data and the ambitions of a deep-pocketed rival.

Read more »

Rede arrow on a stock market chart going down.
International Stock News

Why Microsoft stock is sinking today

Microsoft just beat quarterly earnings estimates. So why is the stock falling?

Read more »

US economy and sharemarket with piggy bank
Share Market News

Here's why Goldman Sachs sees a decade of lower returns ahead for US shares

Aussie investors have placed a lot of faith in US shares this year.

Read more »