Pour the Champagne back into the bottle for now – reports that Panasonic had committed to investing a bundle in Tesla’s Gigafactory turn out to have been premature. President Kazuhiro Tsuga told reporters in Tokyo this week that the company plans to move cautiously to reduce its risk.
“Our approach is to make investments step by step,” Tsuga said. “Elon plans to produce more affordable models besides Model S, and I understand his thinking and would like to cooperate as much as we can. But the investment risk is definitely larger.”
Building the gargantuan battery plant, which is critical to Tesla’s plans to produce a mass-market EV, may require as much as $5 billion. Tesla has already raised about $2 billion in a convertible bond sale, and hopes to tap partners for much of the rest. Elon Musk has said Panasonic may be involved, but he told Bloomberg that the Japanese batterymaker’s participation is “not 100 percent confirmed.”
Tesla stock, which soared to all-time highs as plans for the Gigafactory firmed up, dropped back as uncertainty grew about the role of such an important partner. “Having Panasonic as a joint venture partner would facilitate strategic access to Panasonic’s supply chain and reduce risks,” Craig Irwin, an analyst at Wedbush Securities, wrote, lowering his price forecast for TSLA from $295 to $275.
Panasonic is definitely not out, and may yet invest a significant sum – it just appears that they aren’t interested in committing to any firm figures yet. “Our battery production depends on Tesla’s sales, so we have been closely monitoring them,” Tsuga said. “We exchange our opinion on future sales on a monthly basis with Tesla.”