Tesla shares fall on report plant expansion has been iced

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Tesla further elaborated to Electrek that the company believes "there is far more output to be gained from improving existing production equipment than was previously estimated".

Gigafactory 1, the site in Nevada, is a joint venture with $4.5 billion behind it to date.

The pair had meant to raise capacity at the gigafactory near Reno, Nevada, by about 50 per cent by 2020 but financial problems forced a re-think, the newspaper said without citing its sources.

Tesla shares fell more than 2 percent in trading Thursday. In particular, Tesla could see rampant growth China after its Shanghai factory is fully operation.

Although an investment freeze may look bad today, Tesla and Panasonic will still be collaborating.

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Panasonic President Kazuhiro Tsuga's bet on Tesla has also been a source of concern. The Tesla deal with PanasonicThe deal was announced in July of 2014 as reported in a Verge article: "Electric vehicle manufacturer Tesla has today announced a partnership with Japanese electronics giant Panasonic to build a large battery manufacturing plant on United States soil".

The Nikkei report said Panasonic would also suspend its planned investment in Tesla's new Shanghai plant and would instead provide technical support and a small number of batteries from the Gigafactory.

But according to Nikkei, the true reason behind the decision taken by Tesla and Panasonic were the financial hurdles which a review of their plans to raise capacity at the gigafactory by about 50% by 2020 had revealed, Nikkei said. Meanwhile, Panasonic told Reuters that it will "study additional investments over 35GWh in collaboration with Tesla" depending on demand. Tesla has stated that 2019's goal is to produce 360,000 electric vehicles.

So far, Tesla and Panasonic have invested US$4.5 billion in Gigafactory 1. Only Tesla would have better insight into demand planning than the maker of its battery packs, which are said to cost upwards of 40 percent of the cost of the vehicle. "Turning cautious about further investments is good for Panasonic". For the first time in a while, openings at Tesla's Palo Alto engineering and design facility have outpaced that at the company's Fremont, California manufacturing facility.

The Nevada Gigafactory has enough capacity to supply batteries for 500,000 vehicles a year. Tesla's recent deliveries miss has prompted analysts, including at Goldman Sachs, to lower estimates for 2019.