Tesla & Panasonic To Become Battery Rivals?

SEP 10 2015 BY MARK KANE 27

Panasonic energy storage system

Panasonic energy storage system

Bloomberg is considering the possibility of Panasonic and Tesla being competition in batteries, or more precisely, energy storage systems.

The Japanese company is the main lithium-ion battery supplier (sole volume supplier) for Tesla electric cars, energy storage, and Tesla’s most important partner in the Gigafactory.

Beside producing cells for Tesla, Panasonic is developing its own business path, supplying other companies and developing its own energy storage systems.

Is it possible that Panasonic and Tesla will become competitors? At the current stage rather not, but at some point in the future they could compete. It all depends on the Tesla Gigafactory and whether Tesla decided to become a cell manufacturer on its own, or just continues to use Panasonic technology.

Panasonic earns money regardless of who sells ESS (Tesla or Panasonic).

According to Bloomberg, Panasonic is expanding its ESS offer to Europe. They will introduce residential storage battery units first in Germany, and later in the UK and France.

“Panasonic Corp., which makes the lithium-ion batteries for Tesla Motors Inc.’s cars, will begin selling batteries that power homes in Europe, starting in Germany, where people are given greater incentives to switch to solar-generated electricity.

The push into international markets with home batteries will put the Japanese company into direct competition with flagship customer Tesla, which in May unveiled a suite of batteries to store electricity for homes and businesses. Tesla Chief Executive Officer Elon Musk has said Germany is a key market for his product, because of the country’s advanced consumer solar power market.”

The Japanese company expects just 10 billion yen ($83 million) in revenue from ESS outside Japan by fiscal year 2018, so this is not large scale.

On Panasonic’s website for Australia, we found LJ-SK84A home ESS with 8 kWh of energy – not as fancy as Tesla Powerwall, but similar in size.

Panasonic’s residential storage battery system presentation in Australia:

Source: Bloomberg

Categories: General

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27 Comments on "Tesla & Panasonic To Become Battery Rivals?"

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PVH

Well, I am curious whether Panasonic CEO will also soon say “demand is crazy off the hook”..:-)

Speculawyer

No . . . because they won’t have a rockstar like tech demo with an applauding crowd that causes the crazy demand.

PVH

You are right and I was wrong, indeed people usually expect rock stars to build better & cheaper products. I will keep that in mind when buying my next washing machine.

Nick

… or phone.

Clif Jacobs
I have two electrochemical energy storage systems (i.e., batteries) in my house. One is a homebrewed UPS that is a Frankensteined unit mixing a large unit for a server bank and some batteries I selected myself. The other is two deep-cycle Deka solar batteries (best Lead-acid deep cycle product you can buy, IMO) to power a backup sump pump. Between these two I can (1) keep data connections for computers and phones charged through brief (couple of hours) outages as well as run a small string of low-voltage emergency lights, and (2) insure that if I’m not home, the rare event of the sump filling can be relieved for 12hrs continuous, or about 3 days intermittent. My power supply for really bad times at ComEd is a Yanmar diesel generator that sips fuel. I built a very quiet secondary muffler for it, and it can be run largely unnoticed by neighbors. Neither of these takes pictures, keeps me connected to Facebook, matches my wardrobe, or has any measure of cool whatsoever. I cannot watch the latest episode of Empire on them or “like” Kim K’s newest butt-hugging skirt. Batteries are not stylish. Consequently they do not fall in the category… Read more »
Mike777

You’re right, Elon is a great salesman. The whole battery industry is now riding the wave he created.

Amazing.

Clif Jacobs

“Crazy demand” of course being a bunch of clicks on a web page without an installed price, no terms and conditions, no financial consideration… not even a “captcha” block. I personally sent five indications of interest, some from different e-mail addresses and different IPs just to test it. I’ve received three e-mails from Tesla thanking me for my interest, two of which went to non-existent people. (I will give them credit for not acknowledging the interest of Mr. Norsk Flonkerton from Saskatchewan.) Surprise: none of these e-mails provided a price, an installer, or any indication of Ts & Cs.

The conversion rate of legit interest in products requiring small non-refundable deposits through methods like kickstarter is around 30%. It’s less if there is no deposit (but a strong verification process to weed out worthless leads). In a situation like this conversion will be 10% or less from the original gross number.

In Teslaworld the gross number of clicks is called “demand”, but this definition is incorrect elsewhere in our dimension.

Speculawyer

Panasonic is probably a better brand name to use in Japan.

Brian F.

Yes!

Just_Chris

The battery is one component in any of these systems (grid store or cars). Panasonic’s battery manufacturing plants could (probably already do) supply any number of battery requiring products.

Tesla will inevitably have to compete at some stage with products containing Panasonic cells. Some of those might be obvious and others might be less so. I would be surprised (shocked and horrified if I was a Panasonic shareholder) if Panasonic have signed an open ended exclusive supply deal with Tesla. There might be something in place for a set time period but I would have thought a preferential supply deal would be more likely than an exclusive supply deal.

I am willing to bet a small amount of someone else’s money that by 2020 there will be a whole heap of products that contain Panasonic batteries in the area’s that Tesla operates (i.e. home storage, grid storage and cars). Toyota is my bet for the cars, they’ll probably sell the grid products under their own brand.

liberty

Panasonic will need to figure out how to work with tesla, or might be pushed out in the cold. Tesla is the primary driver of their lithium battery business right now, and I’m sure they signed some papers to be in the gigafactory. Tesla can work with LG, or Samsung, or any number of other vendors for these cells. A good split is panasonic sells japan, tesla ROW, with tesla paying fair value for panasonics cells. Straight compete, and I bet panasonic gets replaced in the gigafactory.

Clif Jacobs

I’m not exactly sure what everyone thinks the Gigafactory is, but in its planned implementation it will be a huge building that, among other things, houses the cell manufacturing segment of the battery. The cell manufacturing segment will be designed, supplied and operated by Panasonic. Tesla will purchase the cells from Panasonic.

What leverage does Tesla have once Panasonic is resident in the facility? Read the redacted purchase agreement in Tesla’s filings. While it’s like reading any document with lots of deleted words and numbers, there’s nothing in there that lets Tesla take possession of the Panasonic property in the building.

If the two companies reach some unsolvable impasse, the next cell manufacturer will need to await Panasonic’s departure and then move in his own production line. In a perfect world that’s a 6-9 month process at best, probably a year.

Tesla
does
not
manufacture
cells:
they are landlords for a huge industrial property, and Panasonic can duplicate the Panasonic installation for the Gigafactory line anywhere they wish.

liberty

Well, while I agree that tesla would take a time hit on car deliveries, tesla is panasonic cell customer not just the owner of the building. That gives tesla enormous power in the relationship. IF panasonic pisses them off, they will take awhile to get new cells, but panasonic loses its biggest lithium customer and probably goes from profit to big losses on lithium batteries. LG is likely ahead of panasonic right now on cell technology and their compact power plant in US and korean plant could run ahead. Samsung and JCI could also likely be key suppliers if panasonic chose to compete directly with tesla.

Mike777

The market is in it’s infancy.
All the market’s Elon makes are in their infancy.
There’s room for 10 more Tesla’s out there.

Foo

It looks like the “Panasonic energy storage dishwasher”. Tesla sure beats them on industrial design.

Clif Jacobs

And that will influence consumer choice by a factor probably two orders of magnitude less than price and warranty. Considering that Panasonic BUILDS THE CELLS and already has a huge low-cost supply chain for consumer electronics parts and materials, you can guess which one produce these at lower cost.

Who cares about the design of a system, that is installed somewhere in a basement corner?

Foo

You could say the same thing about washing machines, but they sell them in all sorts of glossy colors these dys. I’m sure that some people buy because they find their favorite color and/or like the “with the coolest styling”.

Someone out there

Maybe Panasonic buys Tesla?

Pushmi-Pullyu

Let’s see, what are the companies’ market caps (total market value of outstanding stock)?

Tesla market cap: 32.31B
Panasonic market cap: 26.87B

Panasonic buying out Tesla wouldn’t quite be a case of the minnow swallowing the whale, but it doesn’t appear likely that Panasonic would be able to come up with that much money.

liberty

I don’t think the money is the problem. The problem is tesla’s management is better than panasonics. IF panasonic bought tesla, then management would likely leave, then it becomes a bad purchase.

james

Maybe more like the male angler fish attempting to swallow a female angler fish… Google it and see how THAT ends.

Mister G

TESLA vs PANASONIC is good for consumers wallet

Clif Jacobs

Agreed. Add in the half dozen or so other significant producers of storage batteries already extant (like LG and Samsung)and the ten or more looming on the horizon and you have what is called commoditization. That condition exists now with a tiny niche market, and will become more so IF this market becomes truly vibrant.

Good for our wallets, but like all commodity items very low margin. This works for Panasonic (PCRFY as traded in the US), whose 5-6% net income meets the expectation of shareholders and is reflected in their valuation. For Tesla (TSLA): not so much.

Bill Howland

Australia is a good place for this seeing as they have relatively astronomic electric costs.

If they can avoid building a few central stations, then maybe the utilities won’t be able to justify their ridiculous rates any longer.

They seem to need more usage actually, what with GM and FORD closing up shop, amoungst others.

Brian F.

Panasonic was selling storage for homes well before Tesla. It’s more of a product update from Panasonic.

The link I had to the product page is now a page not found error. http://panasonic.net/energy/storage_battery/applications/home-smallstores.html

Nich

How much is the unit?