Tesla and Panasonic have paused expansion the Gigafactory 1, as investors increasingly worry about possibly weakening demand for Tesla cars, reported the Nikkei Asian Review on Thursday.
Tesla shares fell 3.5% in premarket trading Thursday morning.
The $4.5 billion Gigafactory near Reno, Nevada, is where Panasonic and Tesla jointly make the battery packs for Tesla’s cars and energy storage products, and where parts of the Model 3 sedan are made. Tesla also plans to build the recently unveiled Model Y crossover at the factory.
Panasonic and Tesla had previously planned to increase the factory’s capacity by 50 percent by 2020, but have since reconsidered their plans, said the Nikkei Asian Review.
The news comes a week after Tesla released quarterly delivery numbers that missed Wall Street expectations by a wide margin.
“We will of course continue to make new investments in Gigafactory 1, as needed,” said Tesla in a statement. “However, we think there is far more output to be gained from improving existing production equipment than was previously estimated.”