Shares of Tesla Inc. and Panasonic Corp recovered after the latter said that its automotive battery venture with Tesla is making better income for the first time. After Tesla posted its second consecutive quarterly profit its stocks soared 20% its largest gain since 2013. While posting of stocks, they also said that they will be comfortably making more than half a million vehicles. On Tuesday, after the Panasonic said that they are expanding production to keep pace with demand from Tesla, its shares closed at 10%.
After the last week’s signing of battery-making deals with Tesla shares of both China’s CATL and South Korea’s LG Chem. Ltd rose 10%. This ended the exclusive partnership of Tesla with Panasonic. The shares EV battery makers Samsung SDI Co Ltd and SK Innovation Co Ltd rose by 9% and 4.5% respectively. The shares of POSCO Chemical Co Ltd rose 4.6%, as it recently signed a deal worth $1.6 billion to supply battery-making materials to LG Chem.
On Monday, Panasonic said that by next year they are expecting to stabilise profit at Tesla’s Gigafactory and improve production efficiency for batteries that are the most expensive component in EV. To compensate for the loss from losing the exclusive partnership with Tesla, the company is setting up a joint venture with Toyota Motor Corp to develop a type of EV battery.
Kang Dong-jin analyst at Hyundai Investment & Securities in Seoul, said that few years ago there were doubts about whether the EV era would arrive. However, owing to Europe’s stringent emission regulations and Tesla’s strong sales there is more viability.
European Union recently published more stringent emission rules after Volkswagen AG confessed that had cheated diesel pollution tests. Also, on Tuesday, Britain announced a ban on the sale of new petrol and diesel cars from 2035.