In the third quarter of 2018, Panasonic lost $65 million in the branch of the business that makes battery cells to power Tesla’s electric vehicles, according to . The company said it had to add production and hire workers more quickly than expected as Tesla aggressively ramped up to producing 4,300 Model 3 vehicles a week.
In September, the head of Panasonic’s Automotive Division said that the company was on track to complete three new production lines at Tesla’s Gigafactory in Sparks, Nevada, by the end of the year. That would bring the total number of battery-cell-producing lines at the Gigafactory up to 13.
The Model 3 ramp up that ate into Panasonic’s bottom line didn’t have the same effect on Tesla, which posted its first profitable quarter in several quarters last week. It shares soared.
Panasonic, for its part, does not seem to think the dramatic expense increase is in vain. According to Reuters, Panasonic CEO Kazuhiro Tsuga says the company intends to continue investing in capacity at the Gigafactory. Tsuga added that Panasonic is focusing on building out capacity in Nevada before it starts thinking about building any capacity at Tesla’s planned factory in Shanghai. Tesla purchased a plot of land in the Chinese city earlier this month.
“Investment for capacity beyond 35GWh means that Tesla would also need to make substantial investment in vehicle production, so we will closely align with each other,” Tsuga said, according to Reuters.
Tsuga also reportedly commented that he was concerned about the behavior of Tesla CEO Elon Musk, who ran afoul of the Securities Exchange Commission (SEC) for allegedly violating federal securities laws with his tweets. (Musk recently reached a settlement with the SEC which included terms that will force him to step down as chairman of Tesla.)
However, Tsuga said that, as long as Tesla continues operating without too much strife, Panasonic is willing to stay a partner. “Though Elon’s comments are unpredictable, we will continue to monitor Tesla’s operations to ensure no chaos there and will work in step with the company,” Tsuga said, per Reuters.