Panasonic Expects Profit Soon For Tesla Battery Plant

Panasonic Corp. expects it will soon earn a profit on its investment in Tesla Inc.’s Gigafactory battery plant in Nevada.

President Kazukiro Tsuga tells Bloomberg News that the company already earns a profit on batteries it makes in Japan for Tesla’s Model S sedan and Model X crossover electric vehicles. The company told reporters earlier this week that its Tesla operations will begin to contribute profit during the current quarter.

Panasonic’s investment in the factory will exceed 200 billion yen ($1.8 billion) by the time the facility reaches its phase-one capacity of 35 gigawatt-hours. That level of cell output would be enough to make more than 400,000 EV batteries per year.

Tsuga tells Bloomberg that Panasonic will have 13 production lines in operation at the Gigafactory by the end of this year. That’s enough to reach the 35 gigawatt-hour target.

The Nevada facility is intended primarily to supply Tesla’s new Model 3, the company’s first mass-market EV. The carmaker has struggled for more than a year to overcome production snags but ramped up Model 3 output significantly in October.