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Panasonic
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PCRFY -0.92%
His battery business lost money for the second consecutive quarter with the acceleration of production of the automaker 's Model 3 sedan.
On Wednesday, Panasonic recorded an operating loss of 7.3 billion yen ($ 65 million) for the past quarter in the commercial sector, supplying the battery cells that power Tesla's electric cars. Elon Musk, CEO of Tesla, strives to produce 5,000 basic 3 models a week, a pace that he said needed to generate steady profits.
Last week, Tesla announced a record quarterly profit, attributing an increase in model 3 shipments, which starts at $ 46,000. Tesla said it produced an average of 3,300 models 3 per week, excluding scheduled shutdown, during the quarter.
Panasonic said it will increase production faster than expected and hire more workers at the Nevada battery factory, which it operates in conjunction with Tesla, known as Gigafactory. The increase in fixed costs has pushed the company into the red, he said.
"We are investing a lot of people to keep up with the pace of production," said Hirokazu Umeda, chief financial officer of Panasonic.
Umeda said Panasonic hoped to benefit from Tesla's increased sales during the second half of the Japanese company's fiscal year, which will end in March. Its objective is to generate an operating profit of 22.1 billion yen over a full year of the battery business, which lost 8.4 billion yen in the April-June quarter.
Mr. Musk's
the activity attracted the l 'ire of the regulators. Panasonic chief executive Kazuhiro Tsuga said he was worried about the tweets, but business relations remain intact.
"Elon being Elon, it is very difficult to predict what he will do in the future, but we hope that there will be no confusion in the same business ", said Mr. Tsuga. "It is important for us that Tesla's business is running smoothly over the long term and stably."
Tesla is its biggest battery customer, but Panasonic wants to sell more to other automakers.
"We try to cover the risk as much as possible," Tsuga said.
Write to Sean McLain at [email protected]
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