Panasonic and Tesla factory scrap half a million batteries a day

Problems with cleanliness and SOP failures are issues disclosed by employees of the Gigafactory in Nevada

Half a million batteries a day are said to be scrapped at Gigafactory 1, the lithium-ion battery plant and electric vehicle subassembly factory shared by Tesla and Panasonic. The sorry state of affairs has been disclosed by a former employee to Business Insider who argued that "people are slobs and the stuff’s not clean".

The site, located near Reno in Nevada, US, is used by Panasonic to make the cells for Tesla car batteries. "I do not think that Tesla knows everything [that goes on on Panasonic's side]," a former employee told BI.

Other employees told the news outlet that on several occasions items fell into the mixers that blend the chemicals for the batteries. The 16-foot vats contain, among other things, the volatile lithium that is the namesake of the product. The items (scissors, a roll of tape, a tool) are normally discovered when the equipment is being cleaned after the fact.

Another risk reported was significant contamination detected in relation to an oil spill. Mechanical oil contaminated equipment, which then passed on to the product. Once detected, employees had to stop production and determine any potentially affected products.

A current employee expressed concern that the start of the spill hadn’t been correctly found. When combining this with apparent staff purposefully interfering with traceability for the sake of not interrupting production, the episode puts a question mark on the reliability of the end product and the causes of contamination.

All three current and former employees that spoke to BI said that rules for cleanroom dressing often go ignored. If this is the case, all product that moved through that area may be impacted. Some may be discovered as defective and appropriately scrapped, but others may slip through with minimal contamination but unknown effects down the line.

The phase of production that produces most of the scrap at the factory is the winding phase.

Mark Ellis, a senior associate at the manufacturing consultancy Munro and Associates, said that winder shouldn't be scraping much at all. A spokesperson from Panasonic disagreed, however.

The big picture

This problem with cleanliness and with staff ignoring SOPs is apparently forcing the facility to scrap half a million pieces a day. Comparing this to the three million battery cells daily that the company ships to Tesla, this is a substantial proportion of the output.

As battery supply is still the fundamental constraint on the production of Tesla products, this is by no means an issue to be overlooked. However, both companies have expressed the opinion that more can be produced with the equipment already in place.

If this level of pressure keeps up, or gets worse, the cracks in the system will only deepen. Staff will feel the need to further trick the system to keep up with demand.

At the end of the day, it is Tesla who will take the hit if major contamination slips through the cracks, so it in their interest to take action and investigate this update.

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