Posted on 04/11/2019 10:22:37 AM PDT by Yo-Yo
Future investments from the battery maker in U.S. and overseas facilities are reportedly in question, making stock prices suffer in the early hours.
Tesla and battery manufacturer Panasonic will freeze investments into the automaker's Nevada-based battery plant over weakening demand concerns, reports Japanese publication Nikkei.
Both the automaker and Panasonic had reportedly considered raising production capacity by more than 54 percent by 2020 (from 35-gigawatt hours to 54 GWh), however, due to apprehension surrounding financial and demand problems, the partners will not proceed with the expansion as planned, halting further construction of the Gigafactory barring further consideration.
Tesla shares have fallen as much as 4.7 percent during pre-market trading.
Inside of the Gigafactory exists two operations: battery cell production and battery assembly. Panasonic has been producing 2170 battery cells for Tesla's Model 3 since 2017 in one area of the factory; Tesla then packages the battery cells inside of its packs and ships the units off to the automaker's assembly plant in Fremont, California.
The sudden change of heart could be due to concerns over dwindling demand following a troubling first quarter in 2019. Tesla's sales slump of more than 30 percent raised questionable brows as the automaker fought to deliver cars overseas in meaningful numbers amid both markets' regulatory and logistic adjustments. But for investors, the decline was an indicator of demand drop off, something with CEO Elon Musk had previously identified as being inhibited by the high upfront cost of electric cars.
"It's important to appreciate that the demand for Model 3 is insanely high. The inhibitor is affordability," said Tesla CEO Elon Musk during the automaker's Q4 2018 earnings call. "It's just like people literally don't have the money to buy the car. It's got nothing to do with desire. They just don't have enough money in their bank account. If the car can be made more affordable, the demand is extraordinary."
Tesla responded in late February by releasing two new trims of its Model 3, the long-awaited $35,000 Standard Range variant, and a slightly more premium Standard Range Plus. At present time, it is not believed that any $35,000 Model 3s have actually been delivered despite its release 42 days ago. Deliveries were initially said to begin between 14 and 28 days following the vehicle's release.
In late 2018, Panasonic was considering an investment of between $900 million and $1.35 billion for the Gigfactory's expansion, yet, six months later it has reportedly reconsidered its funding. The Gigafactory, according to Tesla, is only 30 percent complete at its current development.
“We will, of course, continue to make new investments in Gigafactory 1, as needed." a Tesla Spokesperson told The Drive, "However, we think there is far more output to be gained from improving existing production equipment than was previously estimated.”
Furthermore, Tesla had initially planned to produce its upcoming Model Y crossover at Gigafactory 1 in Nevada. It's unclear what the halt in expansion means for the change in the production facility, however, without expansion, there is likely no additional production line for the Model Y at the facility.
Another surprise twist is Panasonic's reported decision to also suspend its investment into Tesla's brand new Gigafactory in Shanghai, a newly penned facility of which construction has not yet completed. According to Nikkei, Panasonic will provide Tesla with technical support and a "small number" of batteries produced locally at the China-based Gigafactory.
Contrary to the report, Panasonic had not publicly announced an investment in Gigafactory Shanghai previously. Reports from earlier this year indicated that Tesla was testing the waters with several battery manufacturers for the contact with its Shanghai facility; as of today, there has been no release stating that a vendor had been selected. Nikkei continues its reporting by stating that Tesla will reportedly source batteries "from a number of makers" for its local-market cars moving forward.
Thanks Yo-Yo.
[I want a free supermodel]
I found this secret place full of supermodels. But then I lost my picture of man-hands. It was like the Forbidden City.
https://www.youtube.com/watch?v=KbHxlS2o-m4
Go read it. Not long, not hard to understand, hysterically absurd. No surprise Democrats won’t actually vote for it.
[hysterically absurd]
I hope AOC continues to do her thing - Nancy is worried
Panasonic is into much more than just audio equipment, stereos, TV sets, etc?
Toy electric cars were never going to be mainstream, folks. The electric grid is NOT designed for such.
The difference?
I had a lack of $$ for my Challenger but I said #### it. The only day of the month I regret the car is the car payment day :)
Some idiots like me will do that for a sports car they really want!
NO ONE is going in over their heads for a tesla!!!!
Panasonic is just slightly ahead of their time.
(If you remember their 1980s ad campaign.)
Do they have what plants crave?
But seriously, I see a few Tesla 3’s in the parking lot here (engineering facility), and I don’t see what gets people so excited. For the money, I’d rather buy something fun and the difference in price will more than pay for the gas.
What I really need to do (if I even still can) is get one last car before all the car ninnies, I mean nannies, I mean whatever they are’s take over. I love my G8, but I doubt it will last long enough for me to be buried in it. Perhaps a BRZ would fit the bill, or maybe a Mustang.
Decades ago, a good friend retired from the foreign service and moved back to California. They had limo service at every embassy. So, they didn’t own any cars except a Ford Victoria they had while stationed in DD. They kept that vehicle in storage when they went over seas.
Also, they had two teenage daughters from hell and a son approaching that age group.
Each teen wanted their own car. His BIL suggested that he buy two ugly Pacers that the teens would drive if the parents didn’t need them.
They bought the mung brown Pacer and puke yellow Pacer. The kids refused to drive the Pacers. If they were driven to school, the kids wanted to be dropped off a couple of blocks away.
Besides being embarassed with an old person’s Victoria. They had to pay for the gas they used. The Dad would fill it back up the next day and deduct the cost from the driver’s allowance.
Solyndra II
Tesla? No.
Democrats? Most assuredly.
[The kids refused to drive the Pacers.]
Brilliant plan.
Friend in high school had a ‘70 or ‘71 with a 440 Magnum.
In near perfect condition.
Wow!!
Here’s a story with a different explanation:
https://finance.yahoo.com/news/panasonic-says-reviewing-further-investment-095456810.html
TOKYO/BENGALURU (Reuters) - Panasonic Corp and Tesla Inc will continue to make new investments in the U.S. electric carmaker’s Gigafactory as needed, but believe they can squeeze more out of existing resources than previously planned, Tesla said on Thursday.
The two companies were responding to a report by Japan’s Nikkei that said they had frozen previous plans to raise the capacity of the plant, which supplies battery packs for Tesla cars.
“Both Tesla and Panasonic continue to invest substantial funds into Gigafactory,” a Tesla spokesperson said.
“That said, we believe there is far more output to be gained from improving existing production equipment than was previously estimated.”
...
Tesla is also in the process of buying Maxwell, which should give them a significant boost in battery production and capacity, which could give another reason for them to delay expansion until that acquisition is complete.
It was a deep red wine color. So that pic may not be 100% accurate. Perfect color combination with the white vinyl top and the white interior.
Love!!!!!!!!!!!
I’m in love!!!!!!!
A beauty!!!!
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