Panasonic May Increase Tesla Gigafactory Investment Despite Profit Hit

Panasonic’s profits have taken a hit due to its collaboration with Tesla at the automaker’s battery Gigafactory, but the tech giant could invest even more money at the plant.

Reuters reports that Panasonic’s collaboration with Tesla has yet to yield a profit, but that an investment beyond its current $1.6 billion contribution could nevertheless come next year. This added investment will allegedly lift capacity at the plant beyond the 35 Gigawatt hours it is set to hit by the end of March.

While increased sales of the Model 3 helped the automaker report a healthy profit in the third quarter, the same can’t be said about Panasonic. In fact, profit dropped by 15 per cent to $840.92 million. One of the reasons for this fall is that Panasonic had to increase spending on battery cell production to keep up with Model 3 production while also sending more of its engineers to the United States. Slower demand for factory automation equipment in China also hurt the company’s bottom line.

Panasonic chief executive Kazuhiro Tsuga said that any additional investment at the Gigafactory will only come if Tesla also makes substantial investments in vehicle production. He also downplayed the possibility of Panasonic investing in Tesla’s upcoming Chinese plant, saying it “will put priority on building additional capacity at the Gigafactory over China.”

According to Tesla, its entry-level Model 3 was the fifth best-selling car in terms of volume in the United States in July-September and the best in the country in terms of revenue.

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  • Bash

    Am I the only one who is doubting Tesla to survive beyond 2025? As much as I’m not against Tesla to be honest, but it have so many mega-giga financial issues among other different issues that I almost feel that one day we might all wake up in the morning reading the news about Tesla went bankrupt.

    • Mike anonymous

      Tesla’s entire problem (future-wise) in my opinion is that their entire company revolves around a singular technology; Batteries (for their cars, power walls, 3rd-party distribution). Suppose someone comes along and does the battery better or introduces something completely new… then what??? Tesla’s profits as well as their cashflow do not actually come from their vehicles,. they don’t sell enough (S, 3, or X). Most of their money comes from ‘Investors’.

      Tesla’s entire business model revolves around a singular technology that 7years (or maybe 100years) from now, may not be around. (People thought Floppy drives were going to be around for decades during the 90’s, but look where we are now). If those investors stop investing when batteries (someday) become a thing of the past, then it would be over for the company entirely.

      I’m not saying they will fail,. but longevity is not promised to many companies who’s core focus are a variation of products who’s only selling point is a simple singularity (in this case; kind of technology).

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