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Tesla Gigafactory 1 could grow as partner Panasonic reports more profits

Panasonic's partnership with Tesla was in the black again last quarter, and the two are in talks to expand capacity.

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The Gigafactory is supposedly stretched beyond capacity right now.

Tesla

Not only did Tesla pull a profit in the first quarter of 2020, but its battery partner Panasonic said on Monday its battery business recorded earnings in the black, too, for the second time. Now, Gigafactory 1, based in Nevada, could see an expansion.

Reuters first reported on the possible capacity expansion at the plant during its first-quarter earnings call. Panasonic Chief Financial Officer Hirokazu Umeda specifically said the company was "in discussions right now" to expand work at the facility. Although the company is no longer Tesla's exclusive battery provider (the company works with LG Chem in China), the partnership has blossomed in recent years and recorded two profitable quarters. 

Overall demand for Tesla's cars likely helped push the battery business into profitable territory. Umeda mentioned demand is beyond the current capacity of 35 gigawatts per year.

Panasonic declined to comment further on the news. Tesla did not return a request for comment.

The executive also appeared to suggest new batteries in the pipeline for Tesla vehicles, which has become a hot topic as of recent. Last week, reports surfaced suggesting Tesla's rumored "million-mile battery" could debut soon before it rolls out in China. The longer-life battery would nix cobalt usage and be more affordable to produce, perhaps bringing EVs to cost parity with gasoline-powered vehicles. A version for North America was also mentioned.

However, work on this battery supposedly took place with China's CATL, not Panasonic. But, there's always the possibility for more battery breakthroughs.

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First published May 18.