Panasonic Sold All of Its Tesla Shares For an “Insane Profit”

Tesla and Panasonic have had a rocky, yet symbiotic relationship over the last eleven years. Panasonic has been making EV batteries for Tesla for ages, and all that time, they’ve held onto their Tesla stocks. Until now. Panasonic just sold all of its Tesla shares at the same time that they’ve vowed to make even more electric vehicle batteries. 

A white Tesla electric car on display at a Panasonic booth at a car show.
A Tesla electric car on display at a Panasonic booth | David Becker via Getty Images

How much of Tesla did Panasonic own?

The Panasonic Corp. logo on the company's showroom in Tokyo, Japan.
The Panasonic Corp. logo on the company’s showroom in Tokyo, Japan | Kiyoshi Ota/Bloomberg via Getty Images

Back in the day, Tesla could barely convince anyone to make batteries for them. Tesla was the first to put a lithium ion battery in a car. At first, battery manufacturers weren’t sure it was a good idea. Yet Tesla has a way of convincing people that its crazy ideas are actually sound business decisions, and Panasonic agreed to make their batteries. 

According to Electrek, when Panasonic signed the battery agreement with Tesla in 2010, it was optimistic that things would work out. In fact, Panasonic was so convinced that Elon Musk and Tesla knew what they were doing, that they invested in Tesla. Panasonic bought 1.4 million shares at a total cost of $30 million. At the time, it was a substantial investment in what was then a relatively small company. 

Why did they dump them?

The Panasonic Corp. headquarters in Kadoma, Osaka Prefecture, Japan | Shoko Takayasu/Bloomberg via Getty Images

Panasonic sold every single share. This is partly because Panasonic wants to reduce its reliance on Tesla. This is an interesting turn of events, as Tesla relied so heavily on Panasonic just a decade ago. 

Panasonic also wants to raise cash so they can invest in their own growth. This makes sense, as Panasonic is buying shares of Blue Yonder, a supply chain software company. They’re also working on expanding their EV battery production. 

Panasonic says that this won’t affect their relationship with Tesla at all. It will be interesting to see whether this is true. Panasonic and Tesla haven’t exactly had a sound relationship to begin with. The two companies have gone back and forth over the years, with Tesla blaming Panasonic for slow battery production and high costs.

How much money did Panasonic make from the sale?

A red Tesla drives down a highway.
A red Tesla | Tesla

Panasonic sold its entire investment for $3.6 billion. Even deducting the sizable sum of $30 million, it’s a pretty nice profit. And Panasonic isn’t through with Tesla yet. They’re working on a production line to supply Tesla with even more batteries, even as Tesla ramps up its own production line.

Tesla says that they’ve developed a tabless electric vehicle battery, which will make EV batteries even better. Currently the biggest complaints about EV batteries include their size and short range. Tesla claims to have solved this problem.  

As one might imagine, Tesla’s announcement that they’ll be producing their own batteries has left Panasonic less than thrilled. Still, they’re committed to their business relationship (probably because it’s been pretty profitable for them so far). Panasonic is developing a prototype of the new battery that Tesla has designed. If it’s successful, it’s likely Panasonic will continue to develop EV batteries for Tesla. It would also likely sell the batteries to other electric vehicle manufacturers as well. 

The sale of the Tesla shares will be a huge boon for Panasonic. We’ll have to see whether it affects the working relationship between the two companies. And even though Panasonic says it won’t change anything, perhaps it would be better if something did. 

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