Tesla and Panasonic have put expansion plans on hold for the Gigafactory near Reno.
The $4.5 billion dollar factory is where the companies jointly make battery packs for Tesla electric cars.
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Published reports last week said plans to increase capacity 50 percent by 2020 have been shelved. Panasonic also suspended further investment in Tesla's new Gigafactory near Shanghai.
Tesla said in a statement it plans to improve existing production facilities before considering expanding the Nevada Gigafactory. It recently announced weaker than expected sales numbers.
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The Nevada Legislature provided $1.3 billion in tax breaks and other incentives for Tesla to locate its factory in Storey County, just east of Reno.