Tesla Gigafactory 1 battery cell production is "rapidly declining," according to Panasonic, but some improvements in production efficiency have been "delayed."
In recent years, Tesla has become the world's largest consumer of lion battery cells, and Panasonic has been the main supplier since the days of the original Tesla Roadster.
In preparation for Model 3, the two companies collaborated on Gigafactory 1 in Nevada where Panasonic manufactures battery cells that Tesla then assembles into battery packs at the same location.
The factory quickly became the largest li-ion battery factory in the world, but earlier this year Tesla said that Panasonic's battery cell production limited production of Model 3.
Things have improved in recent months, but Panasonic is still not making money factory.
The company reported revenue for the last quarter today, and unlike Tesla, Panasonic reported losses and said its battery business with Tesla stays in the red, via Reuters.
Panasonic chief financial officer Hirokazu Umeda said production is increasing, but they are still working on efficiency:
We are rapidly increasing battery production (at Gigafactory joint venture with Tesla), but improvements in production efficiency have been delayed.
They expect to be profitable on Gigafactory 1
The company was also encouraged to see Tesla make a profit last quarter:  Tesla posted profits in recent revenue, and it is positive for us .
It is interesting that a recent report stated that the Tesla-Panasonic relationship has hit some difficult times. It is alleged that the two companies are arguing over the cost of the cells, investment in the common factory and having a "cultural conflict."
In the report, insiders said that Panasonic told Tesla that they plan to increase the price of battery cells when the car manufacturer achieves sustainable profitability.
The more difficult relationship also happens when Tesla is in the process of producing its own battery cells, which will give competition to Panasonic.
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