Panasonic Growing Concerned Over Risky Tie To Tesla

MAY 11 2018 BY MARK KANE 85

Panasonic is step-by-step returning back to sustainable growth in revenue and net income, according to the latest financial reports, but apparently it’s increasingly hesitant about further investments in batteries.

Tesla Gigafactory

Tesla Gigafactory

The Japanese manufacturer is producing lithium-ion cells in Japan for various automakers – but the majority of its EV battery production is for the Tesla Model S and Model X.

Separately, Panasonic is producing batteries within the Tesla Gigafactory in Nevada for the Model 3 and energy storage systems, but the troubles with ramp-up cut revenues, as compared to expectations.

“The delays cut into Panasonic’s operating profit by about 20 billion yen in the fiscal year just ended and dragged down the figure for the business division that includes electric car batteries.”

The third EV area for Panasonic is its Chinese factory in Dalian.

Read Also – Tesla Model 3 Battery Cell Has World’s Highest Energy Density

According to Nikkei, Panasonic doesn’t have much spare cash for further investment in battery capacity, but will need more capacity for the upcoming demand from Toyota.

“Panasonic’s interest-bearing debts total around 1 trillion yen ($9.2 billion), in the same neighborhood as its cash reserves. That leaves it little leeway for investing.”

It’s also expected that Tesla will soon announce a new Gigafactory in China for both car and battery production. For Panasonic ,it would be tempting to remain the sole battery supplier for Tesla in China instead of leaving the business opportunity for others like CATL.

“That presents a pinch for Panasonic: Pouring still more capital into Tesla has its risks, but so does passing up the chance to be the sole supplier for the electric car maker’s China operations and potentially giving its rivals a boost.”

Here are a few slides from Panasonic’s Q1 (FY2018 financial report):

Panasonic – 2018FY results

Panasonic – 2018FY results

Panasonic – 2018FY results

Source: Nikkei

Categories: Tesla

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85 Comments on "Panasonic Growing Concerned Over Risky Tie To Tesla"

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The article seems to indicate a more positive disposition than the headline.

Yes, not in favor of InsideEV’s turning into AutoBlog. There’s enough troll articles out there about Tesla.

ABG RIP

This is especially the case when only the loss in yen is quoted. That’s about $183 million. Hardly a large amount for a huge corporation such as Panasonic.

I guess the article could have said 3,551,847,000.00 Mexican Pesos. Now that would have REALLY sounded like a lot.

I know InsideEvs doesn’t want to stoke anti-ev stories, but the fatal teenager crash in Florida seems worth a mention. If nothing else because its yet another investigation, this time both NTSB and NHTSA. That doesn’t typically happen.

” If nothing else because its yet another investigation, this time both NTSB and NHTSA. That doesn’t typically happen.”

Unlike crashing Teslas exploding into flames, which seems to happen way too often.
When’s the last time you read a report about a Bolt/Leaf/i3/Volt/etc exploding into flames after a high speed accident?
Makes you think that Tesla’s battery chemistry/pack design is inferior to their competitors, at least from a safety aspect.

Those 2 teens that died reportedly survived the initial impact, but were engulfed in flames due to the battery catching fire and perished a horrible death. 🙁 RIP

The uncensored video was out the day after the accident, I cried when I saw it, as a parent it is the worst video I have ever seen. Thank goodness the video had been censored so others do not have to see, but I feel bad for the eye witnesses as well as they are certainly forever scarred.

I saw a recent picture of a Bolt head on crash that was devastating, front of the Bolt was totally missing, but no fire resulted. Thats what the safety agencies are investigating in this accident, does a Tesla by design have higher fire risk then other EV’s? And if so, why? The results will be interesting.

Why would any parent give their 18 year olds a Tesla? Practically all videos of Tesla fans appear to be drag race videos and even their marketing is heavy with Launch/Ludicrous/etc. I remember being an 18 year old boy. I’m not into blaming people who are grieving but there is a conventional wisdom to starting to drive with a somewhat underpowered, yet heavy, structurally strong vehicle. We all make mistakes. We don’t need to make it in a 0-60 in 2 seconds flash.

Because the Model S broke government safety testing machines and Elon said it was the “safest car ever made”. That’s why.
Guess that statement needs an asterisk or 3.

Seriously your comment make non sense, so in your wisdom pilots show do acrobatic flights with commercial aircrafts because they are the safest machines ever made right.

The old adage is that testosterone and gasoline don’t mix, you can update that to huge battery packs instead of gasoline. If you give a teenage boy a powerful car he’s going to drive it too fast, it’s inevitable. In 1973 I came within a few feet of driving into the open pit that was to become Washington DC’s subway system because some other teenage guy challenged me to a drag race and my buddy who was with me said do it. You should never ever give a teenager a Tesla, you give them a Prius or some else equally feeble.

Yeah a Prius prime is probably the ticket.

A prime if you can get one ,100 mph plus will kill you just as fast as 150.

I’ve posted about this numerous times. It’s a serious lack of judgement on the part of a parent to give their new teenage driver a high powered car. A lot of people probably don’t remember what it’s like to be young and stupid.

Of course any death is still a tragedy, but you have to be smart about what sort if vehicle you provide for your kid to drive. Frankly even a Nissan Leaf has enough get up and go that I’d almost be wary of it.

Tesla needs a parental control app to set a teen driver mode. Enforced “chill” setting. Top speed and acceleration reduction. Geofencing.

GM has such a system:
http://www.chevrolet.com/teen-driver-technology

It is called Valet mode on the Model S.

I’m finding it hard to sympathize, to be honest. Of course it’s horrible to see such things. And it’s human nature to feel more strongly the more personal a tragedy is for us. Stories about individuals therefore affect us the most. But if we want to affect positive change in the world, we better outgrow our mammalian heritage and use our ability to think analytically. There’s currently some twelve million people suffering not for minutes, but all day every day, in conflicts you likely haven’t even heard of – I’m thinking of Congo. Stalin was a monster, but understood people nonetheless. As he put it, one man’s death is a tragedy; the deaths of millions is a statistic. It’s understandable that you feel affected as a parent of teenagers. But it’s not rational to base any action on such feelings alone. I’m not saying cars (and roads!) shouldn’t be made safer because there are bigger problems, just that the emotional impact of any particular accident should never guide our actions. I regard news stories about such things – all the gory details of a tragedy, and zero insight into the larger picture – as social pornography of the worst kind.… Read more »

So… your argument is that if we stop teens from driving Tesla cars, then the overpopulation and depletion of resources which are driving armed conflicts in the Congo will magically disappear, or at least be reduced?

That’s as brain-dead as my parents saying, at the dinner table when I was young, “Clean your plate. There are children starving in China!” So… if I make sure to eat everything on my plate, there will be fewer children starving in China?
O_o

Human overpopulation, both regional and global, is the primary cause of humanity’s worst problems, from wars to famine and starvation to global warming to polluted air and water. But it’s hard to imagine a subject more off-topic to the discussion of this article!

Sounding like Thanos overhere

Lots of bad Tesla crashes where they didn’t catch fire. The crashes where they hit concrete walls at 60-100+ mph is when they have caught fire. And some of those fires happened long after the impact.

One stolen Tesla crashed at over 100 mph and split in half. The back half ended up in a building and the front part of it partially burned but the driver survived. You can see how it was totally split in half and the fire was contained within a few modules. The drive was injured and taken to the hospital.

https://d2t6ms4cjod3h9.cloudfront.net/wp-content/uploads/2014/07/10430362_10203725435683798_531352681451675444_n.jpg

back half that didn’t catch on fire: https://media.nbclosangeles.com/images/1200*677/tesla+model+s+crash+hollywood.jpg

Here are some where there was no fire:

https://cdn.teslarati.com/wp-content/uploads/2018/02/tesla-model-3-crash-accident-2-e1518723359920.jpg

http://www.dailycarblog.com/wp-content/uploads/2016/07/Tesla-Crash-700×374.jpg

https://electrek.files.wordpress.com/2016/08/tesla-rear-ended.png?w=1600&h=1000

The problem with any high performance car is that a lot of these accidents are happening with joy riding at high speeds. Not too many Bolts are being taken out for joy rides at high speeds.

Following the same hysterical logic over Tesla fires let me present some proof that BMW 3-series cars and other BMWs are dangerous because they catch fire all the time.

https://abcnews.go.com/GMA/video/bmw-mystery-fires-abc-news-investigation-47342251

http://i.dailymail.co.uk/i/pix/2017/05/11/20/40350F9D00000578-4496830-The_BMW_in_Brookhaven_Georgia_was_quickly_engulfed_in_flames_as_-a-1_1494531023625.jpg

https://www.ctvnews.ca/polopoly_fs/1.2192081.1421424579!/httpImage/image.jpg_gen/derivatives/landscape_960/image.jpg

https://www.youtube.com/watch?v=kWELOWVLqhE

Thank you for taking the time to put that together.

Yes, you’re right on all points. If non-Tesla PEVs were high performance cars, then we’d see more videos of horrible crashes. Quite possibly the incidence of fire following accidents would be higher too, altho since Tesla does use higher energy-density cells, it does use cells more prone to thermal runaway fires than those used in most PEVs. Tesla has designed their battery packs with excellent fire protection, but in an accident so severe it rips open the battery pack, that protection may be compromised.

Altho Tesla cars do have a higher incidence of fire following a very severe accident, let’s not forget that they are still far safer than gasmobiles, when it comes to the danger of fire.

Until quite recently, there were no deaths at all — zero — caused by Tesla car fires. PEV battery fires are slow to start, and are initially slow to spread. In nearly every case, that gives any accident victim plenty of time to escape a vehicle before it’s consumed in flames.

Serial Tesla basher “Dave” said:

“I cried when I saw it…”

Dude! You just broke my Hypocrisy Meter.

Perhaps you cried with joy, seeing endless plans for using that as part of your future Tesla bashing?

You are a disgusting person to say that… Being a skeptic of the actions of a silly startup car company does not take away ones emotional awareness. Except possibly for a person like you that has no life outside of the EV forum.

Well written from Russia, well done troll

Leaf has low acceleration, couldn’t get up to speed to cause such a crash even if it wanted to. The Bolt is only around in very small numbers, they’re selling something like 1200 every month and their acceleration is more or less standard. Model S is 4.2s, up to 2.4s for 0-60 if the model was capable of Ludicrous mode. We are comparing something akin to a super-car to a standard car and the Leaf.

You live in fairy tale land. Any teenager can crash a Leaf into a wall just as well as a Tesla.

Crashing into a wall at 50 mph after accelerating for 8 seconds is something completely different than crashing into a wall at 80 mph after accelerating for 6 seconds. The former is a Leaf, the latter an S. Kids are much more likely to do something stupid in a car that accelerates as quickly as an S.

Inexperienced Show Off Drivers will get in instant trouble and Go out of Control to the point of No Return , at the Blink of an eye in a High Powered Car ….It’s a fact That Speed Kills..

What you said are true in terms of acceleration. But this crash happened on a corner/turn… It is speed that cause that issue…

A Bolt/Leaf/i3 cannot reach high speeds.
Really.
Too high for city streets but less then 160 km/h

High speed for a wall is over 45 mph.
I have heard of some Leaf’s capable of that.
The point is Teen Driver.
We need an AutoPilot Parent OverWatch mode.

“Makes you think that Tesla’s battery chemistry/pack design is inferior to their competitors, at least from a safety aspect.”

Tesla uses lithium ion cells with a higher energy density than other PEV makers, and yes there is a slightly greater danger of fire due to the different chemistry involved and due to a greater amount of energy packed into a smaller space.

But Tesla cars are still far safer than gasmobiles, when it comes to car fires! On the order of 3x to 5x safer, when comparing equivalent distances traveled.

Describing that as “inferior” is of course just part of your endless FUD campaign. 🙁

Be they are slow, Tesla is like high performing car like, not for teens or idiots trolls.

‘David said: “I know InsideEvs doesn’t want to stoke anti-ev stories, but the fatal teenager crash in Florida seems worth a mention…”
——————-

Recent update:

“…The car’s speed — and not the electric automaker’s partial self-driving Autopilot system — is considered the main culprit in the accident, according to both the NTSB and Tesla. The 2014 Model S was in a residential zone with a 35-mph limit…” source:
https://www.usatoday.com/amp/596728002

AP is not an issue in the most recent crash. Joy riding teens driving a performance car past their driving ability was the cause of the accident. It is the fact the car caught fire so quickly is what is under investigation. Does Tesla’s battery design have inherent flaws that make them more susceptible to fires during high speed impacts compared to other EVs? That is definitely a question worth investigating.

The quick fire and also how hot it was burning such that it prevented fire department from putting it out.

I almost hate to jump into a Telsa Saftey thread… But come on, joy riding teens, in an overpowered car, The driver had been recently (3/3/2018) ticketed for doing 112 in a 50 mph zone in the same Tesla. I surprised he still had a license. They were entering a section known as “dead man’s curve” in a 35 mph zone and hit a concrete wall. With enough force and momentum (P=MV – and a Model S has lot of M), ANY safety system can fail. I’m mildly impressed they survived the initial crash (Yea airbags and crumple zones), but comparing such a crash to an ICE would have likely triggered a fire, at high speeds. I’m certainly sad they perished, especially in a horrible fire, but it’s not like Telsa’s in accidents have a huge fire issue. Especially if you normalize the data, considering the speeds involved in crashes.. All cars have lots of stored potential energy, and large forces can lead to uncontrolled releases (aka fires). I personally welcome the NTSB investigation, and they clearly don’t do that for every auto fire (ICE or EV) so this accident has drawn their interest, so I’m curious to get hard… Read more »

When you look at the very serious Tesla accidents, there is a high percentage of fire. This is why they are being investigated.

Here was a terrible Bolt crash for comparison;

https://www.clickondetroit.com/all-about-ann-arbor/ann-arbor-traffic/2-ohio-women-killed-in-wrong-way-crash-on-us-23-near-6-mile-road-in-washtenaw-county

How about some data (or a citation) to back up the “high percentage of fire” comment.. I’ll buy a correlation between high speed and more fires – as that physics would suggest more energy in the crash, and greater compromise of safety designs.

But I have NEVER seen fire statistics by model – The best I’ve seen is by the NFPA – and it’s dated back to 2012 – https://www.nfpa.org/-/media/Files/News-and-Research/Fire-statistics/Vehicles/osautomobilefires.ashx?la=en

To see the trend over time – https://www.statista.com/statistics/377006/nmber-of-us-highway-vehicle-fires/ – Interesting that things bottomed out in 2013

Neither of these are sorted model, nor is it normalized by the speed of the crash (highways are likely higher speeds). – So if you have access to better data, that point to Tesla’s having “a higher percentage of fire”, I would be very interested in seeing that – Otherwise I struggle with the veracity of that comment

I agree with everything you’ve written, but people who draw conclusions based on one incident certainly will not understand what “normalizing” means. 🙂

I also debated using the term “veracity”, but I figured TFD.com was only 1 click away. 😉

Compare to ICEs, Tesla cars are still very safe. Average rate of fire for ICEs is about 1 fire for every 2636 cars (includes collision, electrical and mechanical failures). Tesla is more like 1 fire for every 75000 cars. The data may not be statistically relevant because of the low occurrence rate but this is all the data we have as far as I know so that is the best conclusion possible. Tesla vehicles are safer than ICEs. Whether they are safer than other EVs is another matter. We’re still talking about a much more powerful EV than average. I also think that the new 2170 batteries in the Model 3 are probably less likely to catch fire than the old models. The new ones have specific gas exhausts per cell and other features to improve safety. Although, only time will tell if they can safely withstand massive kinetic impacts.

There are other problems with such data. Unless your ICE number is only for equally new cars as Teslas (on average rather new, as they sold very few cars five years ago and none ten years ago), the difference could be due simply to age.

Everything I’ve read points to EVs being fundamentally a significantly smaller for hazard than ICE. So I’m kind of inclined to agree with you. But stating your source would be better, and only if that source is scientifically credible and includes a proper discussion/analysis of the data can it be taken as any real evidence one way or the other.

Data is seldom straightforward, and it’s not always as obvious why some numbers are misleading as in this example: I’ve put my feet in the freezer, and my head in the stove; on average, I’m extremely comfortable…

I’m a numbers guy. Can you please translate “high percentage” into a number? You must necessarily know something about what that number is – at a minimum what range it is in – in order to know it is high, right? So why not simply share that with us, instead of only how you’d characterize it..?

The high percentage of fire statement you make comes from where? Your impression? As for the Bolt, you can’t judge based on one incident.

“When you look at the very serious Tesla accidents, there is a high percentage of fire.”

More Tesla bashing FUD.

Here’s an actual, real-world statistic: Up until April 2018 (this year), there were no fatalities caused by Tesla car fires.

None. 0. Zero.

There was one horrible accident very recently for which early reports claim that someone was trapped alive in a burning Tesla car and emergency responders could not get the person out, but I don’t know if the accident investigation is going to confirm that. Early reports of tragic events are often very confused and often wrong.

Also, serial Tesla bashers just love to give false reports about horrible crashes of Tesla cars in which bodies were burned after those inside died, falsely claiming the vehicle occupants were killed by fire even though accident investigators concluded they were not.

People will investigate, blame, and bash Tesla for these fires from high speed crashes.
All you people who continue to mention concerns over every fire are secretly obsessed with Tesla.

Because why haven’t we been investigating Paul Walker’s death for 5 years and calling Porsche unsafe?

P = MV???

This is previously unknown physics, and if you can prove it you’ll surely win the Nobel prize (and the million dollars that come with it).

P is the symbol for power. M is magnetisation or torque. V is normally volume, but can be voltage (but U is far more common) or shear force.

Maybe you were thinking of E = 1/2 * mv^2..? Energy equals half of mass times velocity squared. A Tesla has a lot of m, mass, but as you can see energy only increases proportionally to the mass, versus the square of the velocity. Hence, going twice as fast increases energy fourfold, whereas doubling the mass “only” doubles the energy.

And the “lot of mass” a Tesla has is not that much more than similarly-sized ICE vehicles anyway. 10-20% seems about right. Not the sort of thing that if very significant when the speed of triple if what it ought to be – and the energy thus nine times as high.

See: https://en.wikipedia.org/wiki/Momentum – p=mv

where P = Momentum which can be used to predict the resulting direction and speed of motion of objects after they collide – You can thank Newton for that one.. I can send you an address for the $1MM check, if you want, but I think the physics world already knows about this one. Any yes, I know about the equation for Energy, and your right, velocity matters more than mass (squared versus linear term). And in this particular case, I don’t think M or V was in the favor of the occupants in the Model S

As for heavy, yes, 15-20% extra weight for the battery seems about right – Approximately 800-1000lbs more in mass, depending on model, AWD or note, etc – See: https://teslamotorsclub.com/tmc/threads/what-makes-a-model-s-weigh-so-much.12424/
And as others have said, speed kills, so I agree that V was more of the root cause of the accident here. M just didn’t do them any favors either. The Model S has good tires, but there are limits to everything. We can do the physics around tire friction if you really want: http://www.mate.tue.nl/mate/pdfs/8147.pdf

I saw the uncensored video of this crash.
You can clearly see the 2 teenagers were alive and moving inside the vehicle, so they obviously survived the initial impact. Unfortunately, the car burst into intense lithium battery fire within seconds, so the witness filming the video could not help get them out and they couldn’t get out on themselves.

Fire safety of Tesla cars certainly needs to be investigated. Tesla fires after crashes happened too many times. This is why NTSB was sent out, not because of Autopilot on or off.

I agree this is a absolute horrible way to die… No one deserves this

Tesla is indeed being investigated around fire safety, and that seems appropriate in this case. I also want to see speeds and impact data from the on-board data recorder (assuming it survived).

But I really struggle with “Tesla fires after crashes happen too many times” comment – Do you have some data to back that up? – We definitely have data to suggest that EV’s fires happened MUCH less often than ICE’s fires (by a factor of 5). But I would love to see EV fire statics by model, otherwise this is just a bunch of speculation at best, and FUD around short selling TSLA stock at worst. (the choice is left as a exercise for the reader)

We could use a lot less “inherent flaws” and “Tesla has a higher percentage of fires” commentary, and a lot more hard data. Lets see what the NTSB has to say, they usually aren’t ones to pull punches in the case of flaws, and I’m sure they have better access to fire statistics to most on this thread.

“Unfortunately, the car burst into intense lithium battery fire within seconds…” This is highly improbable, and also very likely an assertion not supported by facts. Unless the video showed the actual crash, there is no way of knowing how long after the crash occurred that the video recording started. More likely, the video recording started minutes after the crash, which would give enough time for the battery pack to overheat and a fire to start spreading throughout the pack. Generally speaking, li-ion battery pack fires are slow to start and slow to spread. Also, Tesla cars give visual and audible warnings to safely exit the vehicle if the car’s sensors sense an overheating battery pack. Both of these things, taken together, have resulted in no — zero (0) — deaths due to Tesla car fires until the very recent incident you describe. Now, there have been a handful (that is, five or less) cases of horrible crashes in Tesla cars where the battery pack was ripped open and, apparently, battery cells were sent flying everywhere, some of which “exploded like firecrackers” according to witness reports. If that’s what happened here, then I would guess it is physically possible for a… Read more »

The other question is are they more susceptible to fires than ICE. There are about 500 ICE fire per month. And no headlines. An EV catches fire (especially a Tesla) and it’s front page news.

I was surprised Electrek covered it. Good for inside EVs to ignore it.

The increasing frequency of articles about accidents involving Tesla cars is an inevitable result of Tesla selling more cars every year.

Personally, I’ll be very very glad when we stop seeing reports about individual accidents involving plug-in EVs, whether they’re made by Nissan or Chevrolet or Kia or Tesla, or whoever.

It’s deeply ironic that the reason serious PEV accidents are news-worthy is that they are so very rare. Gasmobile accidents are almost never considered news-worthy, unless they involve a celebrity or are in some other way far out of the ordinary traffic accident.

Unfortunately, the fact that PEV traffic accidents get news coverage and gasmobile (and diesel truck) traffic accidents almost never do, gives a lot of people a false impression that PEVs are less safe than gasmobiles… despite the fact that statistics very clearly show PEVs are safer!

Also unfortunately, the excessive coverage of PEV related traffic accidents also gives more ammunition to serial Tesla bashers who infest the comment threads here, such as “David” and Bro1999.
🙁

Panasonic is a major business partner with several entities – Tesla is just one of them. Plus Panasonic has their own branded products. They are a true global industry that is focused on profit and long-term economic health above all.

Panasonic will paint the best face on investments made to-date that still have potential, but the speculative Tesla experiment and especially the Gigafactory and Model 3 ramp-up has been, from a conservative Japanese business perspective, a disaster to-date. Panasonic is not in-business to save the world or pump up their stock price. It is to make a profit, pay dividends to shareholders, and be a stable employer. Tesla’s business model is diametrically opposed to Panasonic’s business model.

The lure of a “stable” partner like Toyota for future Capex investments – especially when Capex is limited – has to be very, very strong.

Omg. You seem to believe Tesla’s business model is to save the world, not to make a buck like every other corporation. I’m flabbergasted. It is a publicly owned company and a for-profit entity, and it’s in fact legally obliged to pursue profits! If its purpose was to save the world it would have to formalize the matter and operate as a not-for-profit entity. Elon must be laughing so hard if he ever reads stuff like this. While this company has so far lost nearly ten billion dollars, his private fortune has increased by even more as a result. And all he needs to do is say he’s doing it for mankind, and people will believe it!! He even gets away with saying that wearing his Tesla hat, and then saying we should use his fossil-fuelled rocket to travel Earth-to-Earth, which would be an extremely energy-inefficient and extremely polluting and extremely dangerous way to travel, while wearing his SpaceX hat…! Tesla may be good for the world, if it leads to a faster phasing out of fossil fuels in favour of electricity – especially if we also put electricity on a more sustainable footing. But to think Panasonic is diametrically… Read more »

I may sound foolish here but I definitely have the impression that Elon Musk DID have the “save the world from GW” on his list when started Tesla.

Now, I am not denying that earning a lot of money in the process is agreeable for him :), only that his decision was not purely profit oriented.

Also, I wouldn’t exclude similar factors in thinking from the part of Panasonic executives when they were deciding about the Gigafactory investment.

Runaway climate change is a scary thing when you consider it in its worst-case scenario.

Anybody with children and enough eduction needed to understand GW probably has already somewhat modified mental processes when it comes to decisions like this.

Panasonic is treading carefully as any responsible company should. Tesla, and more Musk’s recent behavior goes directly against Japanese culture. And the delays at GF1 have directly hurt Panasonic’s profit.

It’s a very enticing carrot for Panasonic….but also a carrot that could go rotten at anytime. Exclusive battery partner for Tesla for China production is a YUUUUGE carrot. But if production hell delays happen like they are with the Model 3 US production, that is a risk that also can’t be ignored.

I think Panasonic wants to measure their exposure to Tesla, everyone needs battery cells, those are easy to find companies to buy.

I’m pretty sure Panasonic knows full well that Tesla is in no financial position to build another factory. Tesla’s working capital is -$2.3 billion in the latest report, there is no factory there.

Those BONEHEADS at Panasonic are just like the Analysts…hahahahahaha

I’ve said this for a year or two now; Panasonic will soon get a better deal with another auto maker and eventually end their relationship with Tesla. Tesla simply doesn’t have the economy to compete against VW, Daimler, BMW etc and will face a huge problem sourcing batteries in the next 5-10 years.

If you’ve already said this for two years it seems pertinent to ask how soon “soon” is..?

I hereby predict BMW will eventually go bust or close down! And the longer it takes before this happens, the more prescient it proves I am!

“Tesla simply doesn’t have the economy to compete against VW, Daimler, BMW etc…”

You’re ignoring reality pretty firmly. If Tesla continues its current rate of growth, it will be bigger than Ford in less than a decade.

Panasonic certainly does need to develop large-quantity supply contracts for other EV makers, so it’s not so utterly dependent on Tesla buying from them. But Panasonic is unlikely to voluntarily end its contract with the one customer which, by far, gives it the greatest amount of income!

Finance is an odd world. Panasonic has about as much cash as debt and hence it’s hands are tied. Tesla has as much debt but only a quarter of the cash. No problemo! After all, it might become (barely) cash-flow positive this year – not the year as a whole of course, but maybe a part of it, the second half, or at least one of the quarters…

Maybe this makes perfect sense, but based on just the numbers cited as the reason for Panasonic’s troubles, one should think Tesla was between a rock and a hard place.

Tesla claims they don’t need it, but there will probably be another round of bond sales late this year or early next. They will probably have to pay a higher yield but they will be able to sell them with little problem or worry. But that may be the last time Tesla can come to the trough. They have other ways to gain time before they get to profitable by GAAP standards, but they don’t have a long time to do so.

Tesla has been saying they won’t need to raise money by selling more shares. But they have been very clear that they fully plan on infusing more cash into their operations by making their lease holdings liquid. They will get cash by bundling the individual lease obligations they hold and selling them as bonds to investors.

There is zero contradiction between the two. Selling leases does not dilute shares, they simply convert existing assets into cashflow.

“But that may be the last time Tesla can come to the trough.”

Gosh, how many times have we heard that before? 🙄

You’re not a Tesla basher, Ziv, but here you seem to be parroting a bit of their FUD!

Tesla’s last bond offering was significantly oversubscribed, and very quickly so, despite the credit rating for those bonds being so low they were described as “junk” bonds.

If Tesla’s next bond offering isn’t so quickly oversubscribed, if it actually takes a few days to sell all that’s offered, is the sky going to fall? Will we see human sacrifice, dogs and cats living together, mass hysteria?!?! 😉

Nah, just another Friday (or Monday) for Tesla.

The last bonds issued are now at a Caa1 rating, which is awful. They are also expected to be downgraded again. There is no way in hell that Tesla will be able to raise more money this way. Financial institutions allocate a fixed portion of funds to different rating classes and bonds like Caa1 or lower gets almost nothing. This door is closed for Tesla.

Why did the teenage driver who died in his bruning S a few days ago even still have a licence when he was caught doing 112 mp/h in a 50mp/h zonne in March?
tHAT seems fixable quickly.

Regardless of the license situation, the parents should have taken away the keys.

Panasonic CEO recent statements contradict Headline.

No other car maker uses 21700 so it is not a diversified customer base.

Panasonic’s Chief executive Kazuhiro Tsuga tells a different story, talking about automotive cell sales actually being the key to increasing profits.

“The company said it expects battery cell sales to drive operating profit up 11.7 percent to 425 billion yen ($3.87 billion) in the year through March 2019….Panasonic expects profit at its automotive energy business, which includes battery cells, to more than double after production delays in Tesla’s mass-market Model 3 car pressured profit in the previous year. ”

https://www.reuters.com/article/us-panasonic-results/japans-panasonic-sees-12-percent-profit-increase-driven-by-ev-battery-sales-idUSKBN1IB0X2?il=0 The risk side is just smart business move to diversify their customer base, not some fear of Tesla itself.

Good business practices include the admonition that a company should never allow any one supplier or any one customer to be responsible for more than 20% of their income or their expenses. Panasonic has gone waaaaaaay beyond that with selling batteries to Tesla. The problem detailed in the article here is a good illustration of why a vendor should not become overly dependent on a single customer. IMHO it was a big mistake for Panasonic to close down or sell off so many of their divisions. Panasonic used to be a big name in consumer electronics, but that was decades ago. Now they get a large fraction (I think most?) of their income from selling batteries, and Tesla is almost Panasonic’s only market for that. Certainly Tesla is by far Panasonic’s major customer for li-ion cell supply. If Panasonic can’t compete with Apple, Sony, and other consumer electronics brands, then it makes sense for them to have shut down those divisions. But they should have found other markets to diversify into. Not only does Panasonic really need to diversify, it also needs to start supplying significant amounts of battery cells to other brands of PEVs (Plug-in EVs), to avoid being… Read more »

batteries require a lot of capital. The question is, can you get somewhere else an better return on your capital?
It also pays off to not have all your eggs in the same bucket. I don’t know how much panasonic is willing to invest with Tesla, I’m shure they make a profit but I’m not shure if the profit is high enough to pay for the risks.

Panasonic Tied to Tesla is Taking as Much Risk as a Pedestrian Crossing a Lightly Traveled street on a Green Light…

The Industrial Power Packs is the biggest part and will stay that way. Tesla sells them by the Mega Watt and is working on the biggest one in the world right now with many more to come. The GRID has needed storage for over 100 years and now it’s here.

Panasonic should, and I believe will, be prepared to take the rough with the smooth on Model 3 batteries. The smooth is coming, as Model 3 production ramps and Panasonic revenues follow. They will then be well placed to dominate the automotive lithium ion battery sector.

The question for me is whether they, or Tesla, should be going all in on lithium ion batteries at all, with solid state batteries, and non lithium battery formulations around the corner, and supercapacitors likely to replace batteries entirely within a decade (and replace all ground based ICE transportation at the same time incidentally).

Super caps won’t replace batteries in cars.

I think Panasonic is lucky to have Tesla. They, Panasonic, have been acting the reluctant bride for too long, and should get over it.
Their fates are tied together and they need to work together to succeed.

Even it Tesla would go bankrupt – I’m sure Panasonic would sell battery cells to the company that would buy Tesla. The car is designed around the Panasonic cells. Almost all other cars are designed with prismatic or pouch cell batteries. With the rise of the Model 3 production speed, and not to mention the huge number of people waiting in line.. they have an income source that is basically only limmited of their production speed.. at least for the next 2 years. After that I would guess the Model 3 would face more compatition, but it depends if that matters that much. The growth of the overall EV market is more then Tesla will manage to cover. I would also think that a customer that is very pro Tesla, Audi, Jaguar will buy their favourite brand too, as long as it offers a product that is somewhat competitive. If Tesla keeps using several of the same M3 parts in the Model Y – they will start to get even more benefits of scale. It will for sure be a market with more competition in the years to come. Panasonic should probably consider to market their cell materials to other… Read more »

On the subject of fires. Even Boeing had to redesign the containment battery boxes on the 777

It can’t be assumed engineering gets it right the first time around by design, real world reality sometimes opens your eyes to the need of a better design.

If Tesla’s are high performance cars then maybe they need higher performance protection for their batteries.