1. Comment
  2. Comment
June 30, 2021

Panasonic sells 100% of its Tesla shares and claims no change to relationship

By MarketLine

In the latest annual filings of Panasonic, the company declared the sale of its entire Tesla shareholdings for approximately $3.6bn in order to raise cash ahead of the company’s transition to a holdings structure.

Company spokesperson Yayoi Watanabe said that Tesla were informed of Panasonic’s decision to sell all of its shares beforehand, and that the sale won’t have any consequences for the relationship with Tesla. The sale was made as it’s an important time for Panasonic to raise cash before the company’s transition over to a holding company system, which will involve a substantial amount of restructuring.

No change to Panasonic relationship with Tesla

Panasonic first entered into an agreement with Tesla over battery supply in 2010, and the relationship has on occasion been strained after controversial Tesla CEO Elon Musk criticised the company’s supply on social media platform Twitter.

Panasonic did make around an impressive five times its investment back as a result of the sale of Tesla shares. Whilst the company will be able to use this cash to help transform its business, the gain to Panasonic’s balance book could help the output of its battery production and in the long-term actually help Tesla and its electric car manufacturing.

Just this year, the two companies made a deal securing the supply of batteries from Panasonic to Tesla until at least 2022, even though Tesla has made its intentions known about producing its own batteries, with the 4680 battery cell heralded as the cheaper and more efficient alternative to current batteries.

New CEO’s $7bn acquisition aligns with sustainability goals

Earlier this year, Panasonic acquired AI-driven supply chain company Blue Yonder for a total of around $7bn by purchasing the remaining 80% after the company already held 20%. The move to a holdings company frees up a lot of time and money together with Blue Yonder and will help the company achieve its global environmental and sustainability goals.

The purchase is a particularly important one for the company going forward following the Covid19 pandemic. Blue Yonder’s ‘Autonomous Supply Chain’ technology is the main reason for the acquisition. In order for Panasonic to optimise its supply chain through automated machine learning tech which will be vital considering the squeeze on margins all companies involved in manufacturing have suffered during the pandemic.

New CEO Yuki Kusumi has also highlighted how important he deems the company’s social responsibilities. Kusumi said “We commit ourselves to making further contributions toward creating an ideal society and lifestyles while solving global social issues, including the conservation of the global environment. This challenge will be met by more rapidly delivering excellent products and services to many more customers.”