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Panasonic Won’t Make Tesla Batteries in China

Panasonic Corp., a major partner in Tesla Inc.’s batterymaking “gigafactory” near Reno, Nev., says it has no plans do the same in China to support the electric car company’s new assembly plant in Shanghai.
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Panasonic Corp., a major partner in Tesla Inc.’s batterymaking “gigafactory” near Reno, Nev., says it has no plans do the same in China to support the electric car company’s new assembly plant in Shanghai.

President Kazuhiro Tsuga tells reporters Tesla has the option of supplying its Chinese plants with batteries from local producers or source Panasonic batteries from Nevada.

Panasonic agreed to become a major partner in Tesla’s U.S. battery factory. The facility eventually is intended to expand to a $5 billion complex with the capacity to make enough batteries per year to power 500,000 EVs.

Panasonic vowed to hike its initial $250 million in the gigafactory project to $1.5 billion by 2020. But it may never hit that target. Relations between the two companies have become strained.

Tesla CEO Elon Musk complained in April that Panasonic production inefficiencies hampered the launch of the carmaker’s critically important Model 3 sedan. At the time, reports said Panasonic had refused to invest further in the project until Tesla’s vehicle output grew.

Earlier this month, Tesla announced it had signed a deal to supply its Shanghai assembly plant with batteries from China’s CATL (Contemporary Amperex Technology Co.).

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