Tesla Motors Inc confirmed that the company will be working exclusively with Panasonic Corporation (ADR) to supply batteries for the Model 3. A day earlier, Reuters had reported that Samsung SDI Co LTD was in talks with Tesla to supply batteries for the Model 3 electric car. On Wednesday, Tesla CEO Elon Musk used his magic Twitter account to clear things up saying that Tesla is “working exclusively with Panasonic for Model 3 cells.” His tweet had a good impact on Panasonic shares, which rose as much as 6.3% to a one-week high on Wednesday. It’s amazing how much power one twitter account can have. The stock closed up 1.19%. On Tuesday, Reuters reported, citing a source with knowledge of the deal, that Samsung SDI is making progress in its talks with Tesla to supply batteries for the Model 3 as well as its energy storage products. The source said that the car marker may add Samsung SDI as a supplier for Model 3 if and when the car marker’s battery plant were not able to produce enough batteries to meet demand, Fortune reported.
A Tesla Motors Inc spokeswoman said that “Tesla works with all leading battery manufacturers around the world, however we don’t comment on the details of the programs with specific suppliers.”
Japan-based Panasonic is planning to invest $1.6 billion in Tesla’s $5 billion Gigafactory over the next few years. Tesla wants to boost total vehicle production to 500,000 in 2018 due to “tremendous demand,” Musk said in April. According to the company’s suppliers, the goal will be difficult to achieve.
Although Tesla has received around 400,000 reservations for its Model 3, the actual numbers purchased could be much lower. The $1,000 reservation fee is refundable, so prospect buyers can “withdraw their demand”, for example, they may be put off by the long waiting time. This makes it difficult for the automaker to alter their productive capabilities to match demand effectively. The American car developer and manufacturer is expected to spend around $5 billion on building a gigafactory in Nevada, which is set to open in July. Trip Chowdry, a Global Equities Research analyst believes that the gigafactory could be worth around $50 billion (approximately 10 times what they are paying to build it.)
Will Tesla Be Worth $660 Billion in Next 10 or 15 Years?
Shares of Tesla Motors Inc rose as much as 6% Tuesday after billionaire investor Ron Baron said the company “could be one of the largest companies in the United States and the whole world.”
Talking in CNBC’s Squawk Box, the founder of Baron Capital said he intends to own the company’s stock for the next decade or two. He also hinted that the overall stock market is cheap at current levels.
Baron, who’s chairman and CEO of Baron Capital, expects to make $6 to $7 billion on his Tesla’s investment in the next 10 to 20 years. Baron Capital has $21 billion in assets under management.
Baron said that he visits Tesla Factory about every three or four month to see how much is changing. He said he’s investing in Tesla CEO Elon Musk and the company’s 14,000 workers. “The competition is not anywhere. They could have caught him four or five years ago. But they can’t catch him now. He’s too far ahead,” the investor said.
Baron is very optimistic about the company’s growth. “They’re going to be $20 billion in sales next year, $20 billion. This year, they’re doing $8 or $9 billion. Last year they did $5 or $6 [billion].”
Talking about Tesla’s $5 billion mega-battery factory, Baron said: “They can do as much sales in batteries ultimately as they can in cars.”