Tesla and Panasonic delay plans to increase capacity at their Gigafactory in the US. Leading to growing concerns among investors about the volume of electric car sales, which continually fall below the company’s expectations.

Panasonic also announced it is suspending investment plans at Tesla’s Shanghai Gigafactory. A decision which may stem from Elon Musk suggestion that car battery cells at the Shanghai plant will be sourced from “several companies”.

This points to problems at Panasonic, which had operating losses exceeding 20 billion yen in the financial year that ended in March 2019. Tesla too may be suffering as electric car sales drop, largely due to declining demand in China and a reduction in tax breaks for electric vehicles. Yet, electric car production is also constrained by the high costs of battery production, an area in which investment and innovation are key to brining down costs and barriers to increased production.

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