Panasonic: Battery supplies will 'run out' if Tesla launches Model Y next year

The comments shed light on Panasonic's public spat with Tesla over battery production plans.

Panasonic is apparently worried that Tesla's ambitious growth plans do not consider constraints in battery supplies.

Recent 'leaks' suggest Panasonic's battery production operations at Tesla's Gigafactory have failed to keep up with demand for the Model 3, with alleged yield problems persisting into this year.

Speaking following Panasonic's recent earnings release, CEO Kazuhiro Tsuga acknowledged the battery output issue and shed more light on the strategic conflict between both companies.

"Batteries will run out if Tesla starts to sell the Model Y and expands its business next year," he said, as quoted by Bloomberg. "What will we do then? It's one of a few topics to discuss with Tesla, including battery (production) in China."

Tesla is quickly building its next Gigafactory in China, potentially straining the battery production collaboration with Panasonic. Tsuga's comments suggest the automaker may be seeking additional partners out of necessity.

The California-based automaker has followed a unique strategy for other components, relying on multiple suppliers for some parts to hedge against production difficulties when relying solely on one supplier for critical pieces.