Tesla denies report of a spending halt at Nevada plant

Tesla denies report of a spending halt at Nevada plant

Tesla has stated that 2019's goal is to produce 360,000 electric vehicles.

Panasonic is the exclusive battery cell supplier for Tesla, which in turn is Panasonic's biggest electric vehicle battery client.

"We will of course continue to make new investments in Gigafactory 1, as needed", Tesla said in a statement Thursday.

The companies plan to revisit their Gigafactory expansion plans in 2020 depending on Model 3 and Model Y sales at that time. Problems at the new Gigafactory Through the vertical integration and large scale production at the Gigafactory, Tesla hoped to reduce costs to a level that could not be previously reached in the production of battery cells and packs the company boasted in a 2014 announcement.

However, Panasonic has reportedly suffered substantial losses due to slower-than-expected attempts to increase Model 3 production. This led to delays in meeting Tesla's production goals.

Tesla and Panasonic have paused expansion of the Gigafactory 1, as investors increasingly worry about possibly weakening demand for Tesla cars, the Nikkei Asian Review reported Thursday.

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The news represents a real reversal of Panasonic's plans; it recently expanded the US Gigafactory from 10 to 13 production lines to help the auto maker grow. Elon Musk confirmed late previous year that the automaker's new Shanghai facility could dip into other battery suppliers beyond Panasonic, when the new facility begins operations.

Panasonic's Tesla battery business lost roughly $180 million in the fiscal year that ended in March, according to Nikkei, more than last year. Shares were punished last week following disappointing first-quarter auto deliveries. The stock had dropped 17 per cent this year through the close on Wednesday.

Tesla and Panasonic both have vested interest in the success of Gigafactory, the EV automaker's dedicated battery plant.

As of this week, openings at Tesla are down to 871, the lowest levels we've seen since we began tracking in 2016.

Shares of Tesla fell Thursday following a report the electric auto company and electronics giant Panasonic are suspending plans to expand a battery plant due to weak demand for the vehicles.

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