According to foreign media reports, Kazuhiro Tsuga, CEO of Japan’s Matsushita Electric Co., Ltd., said at the annual financial report meeting that it will work with U.S. electric vehicle manufacturer Tesla to manufacture batteries in China. Panasonic has always wanted to enter the expanding electric vehicle market in China.
Kazuhiro Tsuga said, "As previously reported, Tesla will be fully produced in China in the future, and we will join forces with it." The above remarks are also the first time that Panasonic has admitted that Tesla will manufacture battery cells in China. Currently, Panasonic not only manufactures cell batteries for Tesla's Japanese operations, but also manufactures cell batteries for Tesla's Gigafactory plant in Nevada. Tesla will assemble battery cells into battery packs.
According to Panasonic's plan, the company's business focus will shift from the lower-margin consumer electronics sector. By the end of March 2022, Panasonic hopes to double its auto business revenue to 2.5 trillion yen, and the battery business is very important for achieving this goal. By the end of March 2019, Panasonic hopes its sales of battery cells will boost its operating profit by 11.7% to 425 billion yen (approximately US$3.87 billion). Reuters pointed out that this figure is similar to its statistical average, but it is still lower than the target of 480 billion yen set three years ago. Panasonic said that a stronger yen has reduced its overseas profits.
In the previous fiscal year, Tesla’s production slump in Model 3 brought pressure on Matsushita’s profits. However, Panasonic expects that its automotive energy business, including battery cells, will double. Earlier this month, Tesla promised that its Model 3 week production capacity could reach 5,000 by the end of June. In order to reduce the risk of over-reliance on Tesla, Panasonic also jointly developed electric vehicle batteries with Toyota Motor. According to Tsuga, "The negotiations with Toyota are progressing well."