Panasonic confirmed Friday that it sold its stake in electric car company Tesla for about $3.61 billion in March amid a broader push by Panasonic to reduce its dependence on Tesla as a battery and electronic buyer and raise cash for investments.
The stake sale will not affect the partnership with Tesla, a Panasonic spokesperson told Bloomberg, and was made as part of a review of shareholdings in line with corporate governance guidelines.
Panasonic bought 1.4 million Tesla shares at $21.15 each back in 2010 for about $30 million. That stake was worth $730 million at the end of March 2020. The shares have gained almost seven-fold since then.
The share sale comes as Tesla focuses its efforts on diversifying its own battery supply chain. Tesla has struck deals with South Korea's LG Energy Solution, a unit of LG Chem, and China's CATL, with Reuters reporting the latter is planning a plant in Shanghai near Tesla’s Gigafactory.
Panasonic's battery business is still dominated by Elon Musk's Tesla, but the two firms have had a tense relationship at times with executives trading barbs publicly.
In the meantime, Tesla is looking at a growing pack of competitors looming bigger in its rear-view mirror, particularly with President Joe Biden's $1 trillion infrastructure plan expected to speed up mass-adaptation of electric vehicles in the U.S., which are already expected to overtake gasoline-powered cars sooner than expected.
Legacy carmakers including Ford (F) - Get Report and General Motors (GM) - Get Report as well EV competitors including Fisker (FSR) - Get Report and NIO (NIO) - Get Report are riding the wave of strong consumer demand for EVs that extend beyond Tesla's S,E,3 and Y lineup, including GM’s battery-powered Hummer truck and Silverado pickup, and Ford’s F-150 Lightning pickup.
Japan automaker Honda on Wednesday joined the growing list of car companies going all-electric, saying it will look to completely phase out sales of gasoline-powered cars by 2040.
Shares of Tesla ended the trading day Thursday up 3.5% at $679.82. At last check, Tesla was up 0.81% at $681.32. Panasonic's shares closed up 4.9% on Friday.