Panasonic is apparently having trouble with the Tesla Model 3. As it’s its battery supplier, Panasonic is struggling to keep up with its production capacity following the increasingly high demand of the Model 3.

Chief executive of Panasonic, Kazuhiro Tsuga, stated that, “Demand would soon exceed our production capacity if Tesla’s sales go smoothly. This follows Panasonic’s call to reduce its profit guidance and to invest in battery production capacity, instead.

The battery supplier had penned down $1.6 billion worth of investment for the Tesla Gigafactory early this year but the Model 3 has been garnering so much demand that the company feels obligated to move up their investment plan, if by any chance Tesla requests for it.

Tesla aims to hit 35 GWh of battery production by 2018 and Panasonic has put in a large investment for its equipment in order to be able to fulfill this.

On a side note, if Tesla obtains the approval for its SolarCity, it is Panasonic that will be helping out in the process. Similar to the Gigafactory 1, Panasonic will be making the solar cells utilized in the SolarCity’s solar products.