Panasonic is now very cautious with further investments in the joint project with Tesla.

When Tesla announced the Gigafactory 3 in Shanghai, China, it said that the battery modules/packs would be produced using lithium-ion cylindrical cells (21700 type) from various suppliers, "including Panasonic".

That still might be the case, but according to Panasonic CEO Kazuhiro Tsuga, there are currently no plans for a new battery plant for/with Tesla in China:

"“We don’t have any plans at the moment to set up a production site in China for Tesla’s Chinese business,” CEO Kazuhiro Tsuga told reporters at a strategy briefing on Friday.

“It is up to Tesla to decide whether it would use Chinese-made batteries from other manufacturers or get batteries from our Gigafactory 1 (in Nevada),” he said."

The main reason behind the "dream-team" possibly splitting ways is the lack of profitability of the battery cell production at the Tesla Gigafactory 1 in Nevada.

The Japanese company is "aiming to make start making profits at least on a monthly basis, by the end of the financial year on March 31 [2020]".

The right word for Panasonic now is "caution":

"Tsuga earlier this year admitted he underestimated risks associated with Tesla."

The question is then, from where will Tesla get batteries for Tesla Model 3/Tesla Model Y production in China?

Supply from Gigafactory 1 sounds like a bad idea and might be considered probably as a short term solution. Panasonic has battery plants in Japan (although it's only ready for 18650 type cylindrical cells) and in China (in Dalian and Himeji, although it's set up for prismatic cells).

Rumors says that Tesla is buying cells from LG Chem's facility (produced at the Nanjing plant in China) and it is in talks with CATL.

There is also an option to launch battery cell production on its own (using some new tech from Maxwell).

Source: Reuters