Panasonic Still Bullish on Tesla
July 08 2016 - 9:20AM
Dow Jones News
OSAKA, Japan—Panasonic Corp. issued a bullish forecast on its
business with Tesla Motors Inc. despite a May accident that killed
a Tesla driver, saying Panasonic's car-battery revenue from the
electric-vehicle maker and others will more than double in the next
three years to about $4 billion.
Panasonic is the exclusive supplier of the lithium-ion batteries
that power Tesla's Model S sedan, Model X sport-utility vehicle and
the coming mass-market Model 3, which Tesla says will be available
late next year. The two companies are building a battery
"gigafactory" in Nevada, set to cost up to $5 billion.
"We are currently installing machinery, and the recent accident
won't affect our plan to launch the factory this year," Kenji
Tamura, the head of Panasonic's energy business, told a briefing
for reporters. The fatal accident, in which a Model S crashed into
a tractor-trailer on a Florida highway, plunged Tesla into
controversy. The company said it was the first death of a Tesla
driver who was using the car maker's Autopilot self-driving
function.
Mr. Tamura said Panasonic will speed up its $1.6 billion
investment in the factory to catch up with stronger-than-expected
demand for the Model 3. He forecast that revenue from Panasonic's
car-battery business, including Tesla, will hit ¥ 400 billion ($4
billion) by the year ending March 2019, up from ¥ 180 billion in
the year ended this past March. Though better known to consumers as
a maker of televisions and home appliances, Osaka-based Panasonic
has increasingly been relying on auto makers for growth.
South Korean battery makers have been looking to cut into
Panasonic's business with Tesla. After recent speculation about
South Korean inroads, Tesla CEO Elon Musk said on his official
Twitter account that Panasonic is the exclusive battery supplier
for the Model S, Model X and Model 3.
Mr. Tamura said he is confident Panasonic will be able to keep
the exclusive contract by consistently improving its batteries,
such as by increasing their lifespan. Analysts say the biggest
question mark for Panasonic is the future size of the electric-car
industry.
"It's not clear yet whether demand for electric cars will
increase at a fast pace," said Yu Okazaki, an analyst at Nomura
Securities. "We should pay attention to gasoline-price movements
and concerns about the safety of electric vehicles, which would all
affect customer preference and the industry outlook."
Panasonic forecasts that by 2025 the automotive battery industry
will grow to ¥ 2.9 trillion ($29 billion), six times its size in
2015, helped by strengthening environmental regulations that may
make it harder for gasoline-powered cars to stay on the road.
Mr. Tamura said Tesla isn't the only customer for Panasonic car
batteries. In addition to the U.S. factory, Panasonic is building a
battery factory in China that is set to start operating by March
2018. It opened a battery R&D center in Yokohama, Japan, in
April.
Write to Takashi Mochizuki at takashi.mochizuki@wsj.com
(END) Dow Jones Newswires
July 08, 2016 09:05 ET (13:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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