Production problems at Tesla/Panasonic Gigafactory may be at an end

The comment was made by Panasonic's CEO the day before Tesla's Q3 earnings report.

Credit: Tesla

Tesla's Model 3 production bottleneck is "now understood," according to Panasonic CEO Kazuhiro Tsuga. Reuters reported on Tuesday that Tsuga, whose company jointly operates a Gigafactory in Sparks, Nevada, with Tesla, told an earnings call that battery production output "could soon be increased." His comments, which come the day before partner Tesla reports its own 2017 Q3 earnings, provided yet another small insight into the "production hell" that has beset the electric vehicle manufacturer as it tries to enter the world of mass production.

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Earlier this month, The Wall Street Journal claimed that the 260-odd Model 3s delivered up to that point had "major portions" built by hand, a charge that Tesla strenuously denied. Although WSJ and others have been pointing to problems with the "body in white" of the Model 3—the mix of aluminum and steel that sits atop the skateboard chassis which will eventually be built by what Elon Musk has previously called an "alien dreadnaught"—from the sounds of things, battery pack production hasn't been quite that simple either.

"This process (for battery packs) will be soon automated, and then the number of vehicles to be produced will rise sharply," Tsuga told reporters. That indicates that until now, the battery pack production hasn't been automated at the Gigafactory. Obviously, such a process needs to be automated for Tesla to realize its goal of producing 20,000 Model 3s a month.

Historically, Tesla has often reported good news in Q3, helped by mid-year bumps in production and sales of emissions credits. Despite the ongoing problems with the Model 3, Model S and Model X deliveries have gone well for Tesla, and the message from battery partner Panasonic that things are getting better may help placate investors during the earnings call on Wednesday.

But it's hard to avoid the fact that Model 3 production is very far behind where Tesla wanted it to be at this point, something that will probably put a sour note on the call. On top of that, the company has fired hundreds of workers in the past few weeks and is being sued for allegations of both racial and anti-LGBT abuse at its factory in Fremont, California.

Ars will cover Tesla's Q3 earnings call, which takes place on Wednesday afternoon.