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Panasonic sells entire stake in Elon Musk’s Tesla

Panasonic lithium-ion batteries, which are part of Tesla Model S and Model X battery packs. Photo: Reuters

Japanese company raises over $3.6 billion to fund strategic investments

(AF) Japanese electronics giant Panasonic sold all its shareholdings in US electric vehicle (EV) maker Tesla for about 400 billion yen ($3.61 billion) in the year to the end of March, a spokesperson for the company said on Friday.

Panasonic has been seeking to reduce its dependence on Tesla and raise cash to fund new strategic investments.

Panasonic’s battery business is dominated by Elon Musk’s Tesla, but the two firms have had a tense relationship at times with executives trading barbs publicly.

But the Japanese firm will continue to supply batteries to the American automaker.

“Our relationship with Tesla as a business partner will not change going forward,” a Panasonic executive said.

All of the Tesla shares held by Panasonic were sold by the end of March, the Japanese financial media outlet Nikkei said.

The gain is believed to account for much of the 429.9 billion yen ($3.88 billion) in “proceeds from sale and redemption of investments” in the company’s consolidated statements of cash flows for that fiscal year, up from less than 50 billion yen the year before.

Panasonic shares rose 4.6% in Tokyo on Friday to 1,306 yen. Tesla closed 3.5% higher in the US on Thursday at $679.82, far off a high in January of $883.09.

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The Japanese company reported lacklustre fourth-quarter results in May, with revenue of 1,826 billion yen, up 5% year on year, and operating profit of 32 billion yen, down 40% over 2020.

“Like many other industrial companies, Panasonic also faced a tough first half and has since seen recovery across industrial and appliance segments,” Jefferies analyst Atul Goyal said.

Panasonic bought into Tesla in 2010, soon after its initial public offering on Nasdaq, and a year after signing its first battery supply contract with Elon Musk’s company in 2009.

The Japanese company bought roughly 1.4 million shares at $21.15 each, giving Tesla valuable monetary support while marking a step forward for the expansion of Panasonic’s battery business.

Panasonic said earlier this year it would buy the shares of US supply-chain software company Blue Yonder that it does not already own, in a $7-billion deal. Its biggest such deal in a decade, the price raised the eyebrows of analysts who pointed to the firm’s spotty M&A track record.

This report was updated on June 25 with further details from Reuters.

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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