| 2:27 PM EST

EV Battery Gigafactory Joins Tesla Shutdown

Coronavirus concerns idles Panasonic cell production
#facilities #Tesla

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The Gigafactory outside Reno, Nev., that makes batteries for Tesla electric cars is phasing down operations because of the coronavirus.

Panasonic, which manages the plant’s cell production, says it is winding down those operations early this week and will then suspend cell output for 14 days, the Reno Gazette Journal reports.

Split Plant

Panasonic partnered with Tesla to open the factory in 2016, initially to make Tesla Powerwall stationary battery systems. Output of EV batteries began a year later.

The Japanese company’s production halt will idle 3,500 workers in Panasonic’s section of the facility. It isn’t clear when or if output also will be suspended in the portion of the plant where Tesla assembles cells into batteries for the electric cars it makes in Fremont, Calif.

Interrupting cell production in Nevada coincides with Tesla’s belated decision to stop making EVs at its California plant, effective tonight. Tesla hasn’t said how long the suspension—a begrudging response to a week-old regional order for area employees to work from home—will last.

Strained Partnership

Panasonic chipped in $250 million to help launch the Gigafactory and originally intended to expand its investment to $1.5 billion this year. It dialed back that timetable when production delays stalled the Model 3 launch for more than a year.

The delay led to a major strain in the Panasonic-Tesla partnership a year ago. Panasonic has since revisited its investment plans, and Tesla has been busy lining up other battery suppliers for its new EV assembly plant in Shanghai.

When fully operational, the Gigafactory will be a $5 billion facility with 4.9 million sq ft of floorspace and the ability to make enough cells to power about 500,000 EVs per year. At that volume, battery prices will become 30% lower than they were in 2016. Tesla CEO Elon Musk has predicted.

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