Panasonic has sold its entire stake in long-standing battery partner Tesla for about 400 billion ($3.6 billion) as it seeks to raise money to fund its largest-ever overseas acquisition.
The Japanese conglomerate, which has a $5 billion battery manufacturing joint venture with Tesla in Nevada, said the sale would not affect its partnership with the US electric vehicle maker.
But the move comes after Panasonic made it clear it wanted to reduce its heavy reliance on Tesla and supply batteries to other automakers as the industry shifts to electric vehicles to reduce its carbon footprint.
The Japanese group acquired 1.4 million Tesla shares in 2010 for $21.15 each for about $30 million. In March last year, it held shares worth 80.9 billion, but that stake had been reduced to zero by the end of March, according to a filing on Friday. During those 12 months, Tesla’s stock rose more than sixfold. It closed at $679.82 on Thursday.
“The goal is to assess strategically held stocks according to corporate governance guidelines,” the company said in an emailed statement. “It will not affect the partnership with Tesla and we will continue to maintain good relationships.”
Since the 2010 investment, Elon Musk has transformed Tesla from a shabby, loss-making start-up to the world’s most valuable automaker, valued at $655 billion — nearly 23 times greater than Panasonic’s market value, even after its shares closed on Friday, April 4. 9 percent higher.
While Panasonic was Tesla’s sole battery supplier, the US group has started developing its own batteries and adding its sourcing partners with South Korea’s LG Chem and China’s CATL to support the growing sales of its vehicles.
For Panasonic, the investment of more than $2 billion in the battery-manufacturing joint venture is finally starting to pay off as the Japanese group delivered its first annual profit from Tesla’s battery business for the fiscal year ended in March.
But the Japanese conglomerate has expanded its investments in other areas to strengthen its position in software. In April, it announced a $7.1 billion deal to buy US supply chain specialist Blue Yonder.
In an interview in March, Panasonic chairman Kazuhiro Tsuga told the The Washington City Times that the group’s partnership with Tesla was entering “another phase.”
“At some point we have to move away from our one-legged approach to relying solely on Tesla,” Tsuga said. “We need to keep an eye on manufacturers other than Tesla.”