Panasonic CEO Kazuhiro Tsuga said the company may not make enough battery cells for Tesla next year, Bloomberg reported.
According to the publication, Tsuga said Panasonic intends to increase battery-cell production this year before deciding whether it will make further investments.
"Batteries will run out if Tesla starts to sell the Model Y and expands its business next year," Tsuga said on May 9. "What will we do then? It's one of a few topics to discuss with Tesla, including battery [production] in China."
Tesla will begin production of its Model Y SUV near the end of next year and is building a vehicle factory in Shanghai where it plans to use multiple battery-cell suppliers. The electric-car maker also plans to expand production for its Model 3 sedan and energy-storage products.
Panasonic and Tesla did not immediately respond to Business Insider's requests for comment.
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Tesla CEO Elon Musk tweeted in April that the rate of battery-cell production from Panasonic has held back Model 3 output.
"Pana cell lines at Giga are only at ~24GWh/yr & have been a constraint on Model 3 output since July," Musk said. "Tesla won't spend money on more capacity until existing lines get closer to 35GWh theoretical."
Musk's tweets came in response to a tweet from Bloomberg reporter Tom Randall, who cited reports that Panasonic had reached a battery-production capacity of 35 GWh per year in March and was halting new investment in Tesla's Nevada Gigafactory as it monitored demand for Tesla's vehicles. (Tesla said the two companies are still investing in the Gigafactory but are also focusing on improving the efficiency of existing equipment.)
Musk said Panasonic's stated, annual production capacity of 35 GWh was "theoretical," and that its true production capacity was about two-thirds of that rate.
"There is 35 GWh/yr 'theoretical capacity', but actual max output is ~2/3. It was physically impossible to make more Model 3's in Q1 due to cell constraints," Musk said.
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