tesla's musk takes on panasonic in a rare public battle with a key supplier - lithium ion battery cells

Elon Musk has had a Twitter spat with a long list of people from rival automakers, short sellers and the Securities and Exchange Commission.
But the risk may be higher this time.
He has had a rare public dispute with a major supplier, Panasonic Corp.
The company that makes all lithium-
Ion batteries powered by Tesla
Electric cars.
The rift began with reports that the companies were easing expansion plans at co-operating battery plants near Renault.
Musk hit back on Twitter and said Panasonic was the culprit because it reduced operating speed and limited the production of Tesla's Model 3 sedan.
The "theoretical capacity" is 35 GWh/yr, but the actual maximum output is about 2/3.
Due to cell constraints, it is physically impossible to make more Models 3 in Q1.
Even by Musk's standards, it is unusual for a company to fight so openly with its largest supplier.
Amid concerns about demand, tiff once again raised the question of Tesla's ability to maintain profitability.
Tesla delivered only 63,000 vehicles worldwide in the first quarter, compared with almost 91,000 vehicles in the first three months, and its inventory dropped nearly 18% this year.
Panasonic is clearly reluctant to increase battery production, which will only increase doubts --
This may indicate greater trouble.
"Tesla and Panasonic need to consult couples as soon as possible," said Craig Owen of Roth Capital Partners . ".
"It looks like a more intense relationship.
"Since the announcement of the Geely factory agreement in July 2014, Tesla and Panasonic have joined the trend, even if they are a strange couple on paper. One is a 16-year-
The old manufacturer of electric cars run by an impetuous boss, and the other is a century-
Old conservative Japanese manufacturers.
Tesla manages the Geely plant, but Panasonic is a major partner in the production of cylindrical lithium-
Tesla purchased an ion battery and then packed it into a battery pack for a Model 3 sedan.
The goal is to produce 35 gigawatts (GWh) of batteries per year by 2020, enough to accommodate about 400,000 type 3 batteries.
But Osaka two weeks ago.
According to Nikkei news, Tesla and Panasonic are freezing capacity beyond the original 35 GWh plan due to concerns about Tesla's sales, which shocked the investment community.
"Panasonic is 101-year-
"Old company," said Chris Riddle, senior portfolio manager at Gordian Capital, Japan.
"For a Japanese company, it is very rare to publicly express grievances against top customers through Nikkei News reports.
Musk said that Panasonic's production lines actually limit the assembly of Model 3 because they only run twice as fast --
Capacity is 30, or 24 GWh.
Panasonic did not respond directly to this statement.
But it said in a statement this week that by the end of the day, the plant did have the ability to produce 35 GWh.
The two companies agreed that the Geely factory was far from fully operational.
It is not so clear how they will proceed in the future. Incorrect.
The Pana cell line of Giga is only about 24GWh/yr and has been a constraint on Model 3 output since July.
There is no choice but other vendors who use Powerwall/Powerpack batteries.
Before the existing production line is close to the 35 GWh theoretical capacity, Tesla will not spend money to buy more capacity.
"Before the existing production line approaches the 35 GWh theory, Tesla will not spend money to buy more capacity," Musk said on Twitter . ".
Most analysts say they see a slowdown in Tesla sales as a necessary condition to limit battery production lines.
But another explanation is that Panasonic is unhappy that a third party might break their marriage.
Currently the only car supplier for Tesla.
Tesla is building another factory --
Known as Shanghai Geely factory
Talked to a few Chinese.
Base suppliers including Contemporary Amperex Technology Co.
"Tesla is starting to flirt with other battery manufacturers in China, and Panasonic doesn't like that," said Sam Jeff, general manager of Kane energy research consultancy, a battery consultancy.
In addition to Musk's tweet, Tesla declined to comment.
The company warns investors that it expects
Quarterly net income will be "negatively affected" by lower than expected deliveries and multiple price cuts ".
Tesla will hold its own investor day at its Palo Alto headquarters on Monday and will announce its earnings on Wednesday.
This is not the first time the two companies have struggled on the production line.
In an interview with Bloomberg on November, Panasonic president kazuiro Tsuga said that in 2017, when Tesla solved the problem on its automated production line, Panasonic retreated.
In 2018, with the increase in car production, Panasonic was behind.
Tsuga said that the production of both sides was close to the average match in early November, and two battery production lines will be added.
Analysts Irwin said the two companies were intertwined and any permanent split could not be possible.
Panasonic needs Tesla to bring stability to its battery business, he said, while "without Panasonic, Tesla has nothing in terms of battery. Still, now
Kazunori Ito, an analyst at Morningstar Investment Services in Tokyo, said the public rift suggested Panasonic might be worried about Tesla's future. “With EV [
Electric car
Panasonic's sales are not growing as expected, so it is increasingly reluctant to take risks . "
"In the past, the two companies shared a common destiny, and it was clear that Panasonic wanted to keep a distance from Tesla, and Tsuga began to draw a line.
Musk is not happy about it.