Tesla Gigafactory 1 battery cell production is still limited to about 23 GWh, says Elon Musk

Tesla Gigafactory 1 battery cell production is still limited to about 23 GWh, says Elon Musk (elektrek)

• Following a report by Nikkei last week, Tesla and Elon Musk have released a statement clarifying the current state of battery cell production at Gigafactory 1.
• Nikkei’s report claimed that Panasonic and Tesla have halted any further investment into production expansion; however, the company said in a statement that they intend to continue investment but are focusing on utilising current capacity first.
• Musk weighed in and stated that production has been falling short of 35 GWh, at 2/3rds capacity. He also claimed that given the battery cell constraints, it was not possible to produce more than the 62,950 Model 3 vehicles that had been produced in Q1.

Analysis & Comments

• The original story in Nikkei last week (no source attributed) claimed that Tesla & Panasonic had decided to freeze spending on the giant EV battery factory in Nevada (Tesla Gigafactory 1) and perhaps most importantly, that this was due to “less than stellar” demand for new Teslas.
• Tesla and its CEO (Elon Musk) denied this, but did say that the “demand for battery cells continues to outpace supply”, which seems to be new information to many.
• It is perhaps understandable that the market is analysing any news story for insights into current and future Tesla production and sales trend, but what is more interesting to me is not what happens in the next quarters, but what happens over the next few years around battery production.
• European automakers have announced a slew of new EV plans, with the latest only last week for the new VW cross over, due to launch in China in 2021.These announcements have created an expectation that battery supply could be a problem (as it seems to be for Tesla?).

• There has been two developments over the last year or so.

1. First, planned battery production in Asia looks like it will grow strongly, partly driven by an expectation of a continuation of strong EV sales expansion in China.
2. Additionally, a number of manufacturers have announced plans to build new factories in Europe. CATL is building a plant in Germany for BMW, LG Chem is also building one for VW & Samsung has retrofitted a plasma display plant in Hungary. Outside of the big Asian producers, Northvolt has started construction of their plant in Sweden, although funding for this has been hard to come by.

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