Panasonic said on Monday it is cutting production of electric vehicle (EV) batteries in Japan by up to 60%. However, while the company is cutting production at home, it is doing the opposite in the US.
During the Panasonic Q3 earnings call, CFO Hirokazu Umeda said the company has already started cutting production at some of its plants in Japan on lower than expected demand from its partners. One of those partners mentioned was Tesla, with Umeda saying they are slowing down production of the 18650 battery cells used in the Model S and Model X, which saw lower sales in Q3 as more customers shifted to the Model 3 and Model Y, which are eligible for the $7,500 tax credit in the US.
The company is expecting this production slowdown to last until at least the end of Q1 next year.
However, while the news for Japan was not great, the opposite is true for Panasonic’s operations in North America. The company operates multiple production lines at Giga Nevada, where they produce the majority of Tesla’s batteries for the Model 3 and Model Y. Umeda said that with both vehicles seeing strong sales after qualifying for the EV tax credit in the US, they have no plans to cut production in North America, and will in fact see growth.
“We can expect a recovery [in Japan], but we will not assume the kind of growth we see in the US at home,” Umeda said.
Earlier this year Panasonic said they plan to increase production of Tesla’s 2170 battery cells at Giga Nevada over the next two years by 10% by adding a sixteenth production line. The additional line is expected to boost the annual production capacity of the facility from the current 38 gigawatt-hours (GWh) to 39 GWh.
During the earnings call Umeda also said Panasonic is not deviating from their plans to produce Tesla’s 4680 battery cells.
