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Battery Maker Panasonic Sells its Entire Stake in Tesla for $3.6 Billion

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【Summary】Tesla’s battery partner Panasonic Corp quietly sold its stake in the company at the end of March, a spokesperson for the Japanese company told Reuters on Friday. Panasonic's Tesla shares were worth about 400 billion yen ($3.61 billion).

FutureCar Staff    Jun 25, 2021 9:00 AM PT
Battery Maker Panasonic Sells its Entire Stake in Tesla for $3.6 Billion
Tesla vehicle battery packs are made up of thousands of individual cells manufactured by Panasonic & Tesla in Nevada.

Tesla's battery partner Panasonic Corp quietly sold its stake in the company at the end of March, a spokesperson for the Japanese company told Reuters on Friday. Panasonic's Tesla shares were worth about 400 billion yen ($3.61 billion).

Tesla and Panasonic currently produce battery cells at the automaker's Nevada gigafactory. Although Panasonic sold a significant position in Tesla, there will be no charge in its business partnership going forward and the two companies will continue to produce batteries in the U.S. for Tesla's electric vehicles.

A Panasonic spokesperson told Reuters that the decision to sell its stake in Tesla was made as part of a review of shareholdings in line with corporate governance guidelines.

Panasonic bought 1.4 million Tesla shares at the bargain price of $21.15 back in 2010, two years before Tesla introduced the Model S sedan. At the time, the shares were worth roughly $30 million. But as Tesla's share price skyrocketed Panasonic's stake rose to $730 million at the end of March 2020. The shares have gained almost seven fold by the end of March when Panasonic cashed out.

Tesla share price closed up 3.5% at $679.82 apiece on Thursday, further strengthening Tesla's position as the world's most valuable car company with a market cap topping $657 billion.

"The impact of crypto assets may have pushed Tesla's share price above its intrinsic value, making it a good time to sell," Hideki Yasuda, an analyst at Ace Research Institute, told Reuters.

While Panasonic gave financial backing to Tesla when it was smaller, the automaker's expansion means there's no need for capital ties, Yasuda added. Panasonic's shares closed up 4.9% on Friday, the biggest jump since January.

Tesla has since entered into battery supply deals with South Korea's LG Energy Solution and China's Contemporary Amperex Technology Limited (CATL) to supply batteries for Tesla's vehicle built at the Tesla's Shanghai factory.

Earlier this month, Reuters reported that CATL is planning to build a major new electric vehicle battery plant in Shanghai close to Tesla's factory, as the company looks to become the world's biggest supplier of EV batteries, according to two people with knowledge of the deal.

In Feb 2020, CATL signed a two-year deal to supply batteries to Tesla for its Model 3s built in China, which began producing cars in late 2019. 

In June 2020, CATL said its ready to build an EV battery with an expected lifespan of 1.2 million miles or 16 years before it needs replacement.  

Panasonic announced a joint venture with automaker Toyota in Feb 2020 to develop and manufacture prismatic lithium-ion batteries for electric vehicles. The joint venture is named Prime Planet Energy and Solutions. Toyota owns 51% of the company, while Panasonic holds the remaining 49%.

As of now, Panasonic remains Tesla's biggest battery supplier. The company also supplies the cells for Tesla's solar roof panels.

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