Panasonic CEO Kazuhiro Tsuga today provided some clues as to when the Model 3 production bottlenecks at Tesla’s Gigafactory might ease up. Citing automation issues leading to production delays, Tsuga said that automation on the battery production line is expected to begin soon, but did not give a firm timeline.
Tesla Model 3 deliveries have been held up in Q3, with only 220 vehicles delivered during the last quarter. Tesla is announcing its quarterly earnings on November 1 after market close, and the announcement comes at an opportune moment. Whether or not the timing of the announcement was a coincidence or not is not known, but it’s certainly something to note.
The Model 3 already enjoys strong and prolonged demand, so revenue is not really the focus here, but Q4 production estimates will be a key factor.
According to Tsuga:
“This process (for battery packs) will be soon automated, and then the number of vehicles to be produced will rise sharply.”
What this reveals is that the process hasn’t been automated so far, which is a possible clue to lower delivery rates this past quarter. In Q3, Tesla delivered 26,150 vehicles, and investors will now be looking for a major boost in delivery estimates, specifically for the Model 3.
That said, Panasonic’s announcement could end up being a double-edged sword. While it could set expectations higher for Q4, there’s a chance that Tesla’s Model 3 deliveries may still come below expectations due to other problems with production.
Although Tsuga did not specify which model(s) were affected by this lack of automation during the past quarter, the assumption is that he was referring to the 2170 li-ion battery cells and packs used in the Model 3. The older 18650 cells for Model S and Model X have been in mass production for quite some time, so it’s not likely that he was referring to those.
Tesla is aiming for a production capacity of 500,000 cars by the end of 2018, and automation on the battery production side of things will be one of the major contributors to Tesla being able to meet its target.