Panasonic's joint venture with Tesla makes first profit after betting $ 1.6 billion

Beijing, February 4th, for the first time, Panasonic’s and Tesla’s battery joint venture has barely achieved quarterly profits, which has left this Japanese company that has so far failed to place a $ 1.6 billion bet on American electric car pioneers Relieved.

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Hirokazu Umeda, Panasonic’s chief financial officer, said the company’s losses with a Tesla battery plant operating in Nevada had been made up as rising production reduced raw material costs.

“By next year, we hope that profits will stabilize,” Umeda said at a news conference on Monday. The improvement in the company’s business conditions echoed Tesla’s strong results released last week. As the group prepares to increase production of the new crossover utility vehicle Model Y, Tesla announced its first consecutive quarterly net profit.

This shift occurred at a pivotal moment for Panasonic. Earlier, Chinese battery maker Ningde Times confirmed on Monday that it had signed a supply agreement with Tesla. After investing $ 5 billion in a “super factory” in the United States, Panasonic became the sole supplier of Tesla’s Model 3 automotive lithium-ion batteries.

Overall, Panasonic’s third-quarter operating profit increased 2.9% year-on-year to 100.4 billion yen ($ 925 million), while the company’s strong performance with Tesla’s joint venture helped offset factory automation The impact of the decline in capacitor sales in China. The Nevada-based superfactory has been struggling to increase production since its start-up in 2017, and relations between the two parties have also deteriorated.

Tesla CEO Elon Musk has previously accused the Panasonic of limiting Model 3 production.

People familiar with the matter said that in part Panasonic was disappointed with Tesla because Tesla Motors sales did not match Musk’s aggressive plans to build new factories in China and Germany.

Another serious problem facing the joint venture is the shortage of battery engineers across the industry. The company said the issue was resolved in December last year.

Panasonic was not involved in the construction of Tesla’s new battery plant in China. Umeda stressed that the Japanese company will still focus on the demand for Model 3 and Model Y in Nevada’s super factory.

He said that after Tesla signed agreements with South Korea’s LG Chem and China’s Ningde Times, Panasonic was “not too worried” about losing exclusivity.