Panasonic Says Tesla Investment Won't Be a Risky GambleSorry the link in my previous post did not work, here's the article ...
..... $5 billion plant, saying any investment decision will be made one step at a time, in line with market demand.
Earlier this month, the Japanese tech giant said it signed a letter of intent to participate in the construction of what the Silicon Valley electric-car maker calls "gigafactory" for assembling vehicle batteries in the U.S. But Panasonic hasn't disclosed how much it plans to invest in the plant.
During a six-hour investor relations event on Wednesday, analysts questioned company executives on how Panasonic will ensure a return on its investment and whether it has any backup plan if demand for Tesla cars doesn't live up to initial expectations.
With Panasonic already expanding production of batteries at factories based in Japan, one key concern is whether it will face overcapacity if it invests in the U.S. plant.
"We will make sure to carry out investments one step at a time in line with demand," said Yoshio Ito, Panasonic's senior managing executive officer who heads the automotive unit.
"Even if we do invest [in the Tesla plant], one factor would be how we're going to divide up our roles and investments," Mr. Ito said.
Panasonic executives also emphasized its lithium-ion battery business doesn't hinge solely on how many electric vehicles Tesla would sell in the future.
In addition to Tesla, the company has also received interest from other auto makers both in and outside of Japan, while its batteries can also be used for power-storage systems, they said.
"We have no intention of taking on a big adventure all at once," Panasonic Executive Officer Shinji Sakamoto said.
Panasonic aims to double its sales from the automotive business to ¥2 trillion ($20 billion) by the fiscal year ending in March 2019, a third of which would come from the car battery segment. The robust performance of its auto and housing businesses helped the company return to profit for the first time in three years for the previous fiscal year.
Tesla Chief Executive Elon Musk earlier said Panasonic would be the only battery company producing cells in the new factory, which will aim to start production in three years. The company has already signed an agreement to provide two billion battery cells to Tesla through 2017.