Tesla Motors Inc has had its share of problems in the recent weeks, but that has not deterred Panasonic’s confidence in the US firm. The Japanese firm – over the next three years – expects to more than double the sales of its electric car batteries to around $4 billion, thanks partly to its alliance with the EV firm.
Partnership crucial for both
This was told by a Panasonic executive about a week after the US firm rivaled a fatal crash involving its autopilot software. Also, Tesla recently announced that it missed the delivery target for the second-quarter also. And, a few weeks ago, Tesla’s stock witnessed a sharp drop after the automaker announced its intention to buy SolarCity for $2.86 billion.
The partnership between Tesla Motors Inc and Panasonic is very crucial for both, as the firms rely majorly on each other for attaining some very important goals. The EV firm has ramped its Model 3 production goals by two years, and now plans to produce 500,000 cars per year by 2018.
The Japanese firm supply the lithium-ion batteries to the US firm for the Model S, Model X and the upcoming Model 3 – Tesla’s lower-cost car. Panasonic is also a major partner in Tesla’s massive battery factory – Gigafactory, which is under construction outside of Nevada.
After recent reports of South Korean firm trying to cut into Panasonic’s business with Tesla, CEO Elon Musk tweeted that Panasonic will be the exclusive battery supplier for the Model 3, Model X, and Model S. Tamura said his company will make all efforts to keep the exclusive contract by continuously improving its batteries.
Panasonic confident on Tesla despite recent accident
Tesla Motors Inc ’s Gigafactory will be responsible for making batteries for the $35,000 Model 3 vehicle. The battery company has already invested $1.6 billion into the factory, and has said to ramp up the investment to meet the massive Model 3 demand – close to 400,000 reservations already.
Panasonic’s energy business head – Kenji Tamura – told reporters, “We are currently installing machinery, and the recent accident won’t affect our plan to launch the factory this year.” At the end of this month, the companies will host a launch party at the factory, which will be producing the batteries by the end of this year.
Analysts believe, the biggest question for the Japanese firm will be to determine the future size of the electric-car market. “It’s not clear yet whether demand for electric cars will increase at a fast pace,” said Nomura Securities analysts. “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.”
On Friday, Tesla shares closed up 0.39% at $216.78. Year to date, the stock is down almost 9% while in the last one-year, it is down almost 23%.