Tesla and partner Panasonic are halting plans to expand production capacity at Gigafactory 1 amid signs of sagging demand for the company’s vehicles, according to a report on Thursday.
Continue Reading Below
Gigafactory 1 is a hub where Tesla and Panasonic manufacture electric battery packs used in the cars, as well as other parts necessary to the production of the flagship Model 3 sedan and other vehicles. Tesla and Panasonic initially planned to raise capacity at the facility by 50 percent by 2020, according to Nikki Asian Review.
Tesla announced earlier this month that it had delivered 63,000 vehicles in its first quarter of 2019, far below analysts’ expectations. Tesla and Panasonic have already invested a combined $4.5 billion into Gigafactory 1, which reportedly has production capabilities to supply 500,000 vehicles each year at present.
“We will of course continue to make new investments in Gigafactory 1, as needed,” a Tesla spokesperson said in a statement. “However, we think there is far more output to be gained from improving existing production equipment than was previously estimated.”
Tesla shares fell more than 2 percent in trading Thursday. Nikkei did not provide details on the sources of the report.
Advertisement
CLICK HERE TO GET THE FOX BUSINESS APP
Panasonic did not immediately respond to a request for comment. The company is Tesla’s exclusive battery cell supplier.
