Tesla Gigafactory 1 battery cell production is “quickly ramping up,” according to Panasonic, but some production efficiency improvements have been “delayed.”

Over the last few years, Tesla has become the world’s largest consumer of li-ion battery cells, and Panasonic has been its main supplier since the days of the original Tesla Roadster.

In preparation for the Model 3, the two companies partnered on Gigafactory 1 in Nevada where Panasonic produces 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 was limiting Model 3 production.

Things have improved in recent months, but Panasonic is still not making money from the factory.

The company reported its earnings for the last quarter today, and unlike Tesla, Panasonic reported a loss and said that its battery business with Tesla is staying in the red, via Reuters.

Panasonic chief financial officer Hirokazu Umeda said that production is increasing, but they are still working on efficiency:

We are quickly ramping up battery production (at the Gigafactory joint venture with Tesla), but improvements in production efficiency have been delayed.

They expect to be profitable at Gigafactory 1 by March 2020.

The company was also encouraged by seeing Tesla turn a profit last quarter:

Tesla posted profits in the latest earnings and that’s positive for us.

Interestingly, a recent report stated that the Tesla-Panasonic relationship has hit some hard times. The two companies are reportedly arguing over the cost of the cells, investments into the joint factory, and having a “culture clash.”

In the report, insiders said that Panasonic told Tesla that they are planning to increase the price of their battery cells once the automaker achieved sustainable profitability.

The more difficult relationship also happens as Tesla is moving to manufacture its own battery cells, which would make competition for Panasonic.

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