Panasonic executives reportedly cautious about future Tesla commitments

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Panasonic executives reportedly cautious about future Tesla commitments

  • Some Panasonic executives are cautious about making new battery manufacturing commitments with Tesla, according to the Nikkei Asian Review.
  • The companies were previously expected to invest in a new factory in China for vehicle and battery production under one roof.
  • In the U.S., Panasonic and Tesla are investing up to $5 billion over the next two years in Tesla's Nevada-based Gigafactory 1.
Elon Musk, chairman and chief executive officer of Tesla Motors
David Paul Morris | Bloomberg | Getty Images
Elon Musk, chairman and chief executive officer of Tesla Motors

Some Panasonic executives are expressing hesitation about new investments with Tesla in battery manufacturing, according to a report out Thursday in the Nikkei Asian Review.

Tesla and Panasonic were expected to set up a new factory together in China, where they would make cars and lithium ion battery cells under one roof. They have an arrangement like this in the U.S. already at the Tesla Gigafactory 1 in Sparks, Nevada.

Panasonic CEO Kazuhiro Tsuga acknowledged on an earnings call Thursday: "Tesla could in the future launch full-fledged production in China, and we could produce jointly."

However, un-named Panasonic executives painted a different picture, according to Nikkei Asian Review, telling the outlet that plans were "not solidified yet" and "nothing is set in stone." Tesla's delays in making previously expressed production targets for the Model 3 cut about 20 billion yen (about $183 million) from Panasonic's operating profit for the fiscal year ended March 31, the report says. Anonymous Panasonic execs also expressed concern to Nikkei at the way Elon Musk treated Wall Street analysts in a recent earnings call.

When Panasonic became the exclusive supplier of battery cells for Tesla's Model S, Model X and Model 3 electric vehicles, their partnership was seen as a triumph over competitors such as Contemporary Amperex Technology in China and LG in South Korea.

Some other industrial suppliers, including Bosch, have dropped out of the EV battery-production game altogether since Panasonic and Telsa first partnered up on the Gigafactory in 2014. And Panasonic is now working with Toyota to jointly develop batteries for EVs as well.

Model 3 battery and vehicle production problems have plagued Tesla over the past year.

Tesla declined to comment on its relationship and plans with Panasonic. Panasonic could not be immediately reached for comment.