Panasonic Attempts to Pull Tesla Out of Production Hell

When Tesla Motors began production of its Model 3 sedan, CEO Elon Musk announced the firm was entering into a kind of “ production hell.” He probably didn’t realize just how accurate a statement that would turn out to be. Already contending with a backlog of orders for the Model 3, Tesla simply couldn’t meet the volume targets it set for itself over the last year. It’s now bending over backwards to finish the quarter strong and prove to investors it is capable of turning a profit.

The automaker frequently referenced production bottlenecks as the culprit for the Model 3’s delay. Panasonic, the sole battery supplier for the vehicle, appears to be taking ownership of the issue. “The bottleneck for Model 3 production has been our batteries,” Yoshio Ito, Executive Vice President of Panasonic, said on Tuesday. “They just want us to make as many as possible.”

However, it’s not really Panasonic’s fault.

Tesla was short an entire assembly line (which was waiting for pickup at its German manufacturing unit Grohmann) for months. “That’s got to be disassembled, brought over to the Gigafactory, and re-assembled and then brought into operation at the Gigafactory,” Musk said in February. “It’s not a question of whether it works or not. It’s just a question of disassembly, transport and reassembly.”

Ultimately, Tesla decided to ship every piece of the necessary tooling via cargo plane to save time. It was then confronted with production restraints at its facility in Fremont, California. That issue was solved through the construction of an outdoor assembly line, but it created a new problem. Tesla found itself having trouble getting vehicles to the applicable delivery centers due to a lack of car carriers. It now claims to be constructing its own while satisfied customers volunteer at its various delivery hubs.

There’s a lot of moving pieces when it comes to the construction of a car. Not wanting to be a weak link in the supply chain, Panasonic already promised to add three production lines at Tesla’s Nevada Gigafactory by the end of the year. However, Bloomberg reports that the company said on Tuesday that it wants to push that timeline up as much as possible.

While not responsible for the battery packs themselves, Panasonic is responsible for the cells that go into them, plus much of the associated tooling. The three new lines will bring the plant’s total to 13, with a claimed capacity of 35 gigawatt hours, Ito said. While the majority of its cells will go into automobiles, some are also intended for home energy storage solutions. That’s a part of the business Tesla hasn’t been as keen on lately.

Either way, the new lines should help. Last November, Musk said the Gigafactory was holding back Model 3 volume — specifically the assembly line that packages battery cells, which Musk blamed on a subcontractor that “really dropped the ball.”

[Image: Tesla Motors]