The electric car market has yet to show much promise beyond concept cars and debuts in the garages of overpaid eco-conscious celebrities, but given their potential in the future, it's not a surprise that many investors are getting their feet wet at the shallow end of the industry.
Panasonic (News - Alert) is the latest to lay its chips on the electric car table. The Japanese electronics giant today announced a decision to invest $30 million in Tesla Motors, the Silicon Valley-based manufacturer of electric cars. Panasonic's financial stake will represent about a 2 percent stake in Tesla. Panasonic already produces the lithium-ion batteries that power Tesla automobiles. Going forward, the two companies will jointly market and sell battery packs for electric cars.
After the announcement, Panasonic shares jumped 3.7 percent to 1,181 yen.
Panasonic is not the first Japanese interest to invest in Tesla. Toyota Motor company ahs already has invested $50 million in the car maker. Toyota, the world's top automaker, has also signed a $60 million contract to have Tesla help develop an electric version of Toyota's popular RAV4 crossover vehicle.
“It is an honor and a powerful endorsement of our technology that Panasonic, the world's leading battery-cell manufacturer, would choose to invest in and partner with Tesla,” said Tesla CEO Elon Musk. “We believe our partnership with them will enable us to further improve our battery pack while reducing cost.”
Tesla opened its first Asian showroom in a fashionable Tokyo neighborhood last month, hoping to woo rich buyers before eventually widening its appeal with cheaper models.
But the company has not turned a profit since it was founded in 2003, and so far Tesla has sold only about 1,000 of its high-end electric cars. It currently sells just one vehicle, the $109,000 Roadster sports car, which is popular among green-minded celebrities and performance-car enthusiasts.
But interest is high in Tesla not only because of concern about auto emissions, but because the company plans to build and market more affordable cars in the future. Governments around the world are offering tax rebates and incentives for electric car buyers to try and reduce dependence on oil.
Nissan Motor Company, which has shown to be bullish as of late on electric vehicles with its new Leaf model ready for delivery in December, has stated that it expects the electric vehicle market to grow to 10 percent of overall global sales by 2020 (other research puts that number lower, however). Current sales of electric cars are negligible.
Naoto Noguchi, president of Panasonic's battery cell unit, said the company hopes to build its reputation as a green company.
Last month, Tesla showed a retooled factory in Fremont, Calif., the site of the former joint venture between Toyota and General Motors (News - Alert) Co., where it plans to produce its next-generation electric sedan, the Model S, in partnership with Toyota, beginning in 2012.
Tracey Schelmetic is a contributing editor for TMCnet. To read more of Tracey's articles, please visit her columnist page.Edited by
Tammy Wolf
