Panasonic Corp (OTC:PCRFY) is expanding its production line at Tesla Inc’s (NASDAQ:TSLA) Nevada Gigafactory in order to boost battery manufacturing capacity, the Reno Gazette Journal reported Tuesday.
What Happened: “There’s some construction work that needs to take place over the next couple of months, Carl Walton, vice president of production engineering and facilities for Panasonic Energy North America, disclosed to the Gazette Journal in an interview.
The executive said that Panasonic would be installing new equipment and production is expected to start shortly after that.
This would be the 14th production line Panasonic adds to the Tesla factory, which is likely to boost capacity at the site by 10%, according to the executive.
Walton didn't disclose the exact gigawatt hours the additional capacity would add but said the current capacity is 35-gigawatt hours per year.
The Japanese battery maker reportedly plans to increase its staffing by 100 positions at the Nevada Gigafactory. Currently, that facility employs nearly 7,000 Tesla and Panasonic workers.
Why It Matters: The two companies entered into a three-year deal this June under which Panasonic would make and supply lithium-ion batteries at Gigafactory Nevada.
The deal was made despite worsening relations between the companies and Tesla’s move towards making its own batteries.
Tesla works with a number of battery makers including China’s Contemporary Amperex Technology Co. Ltd, or CATL, and Korea’s LG Chem Ltd (OTC:LGCLF), which expects its revenue to double to $25.3 billion by 2025.
Price Action: Tesla shares closed 21.06% lower at $330.21 and further fell 1.84% in the after-hours session to $324.15. On the same day, Panasonic OTC shares declined almost 0.5% to $9.01.
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