Panasonic turned its $30 million Tesla investment into a $3.6 billion windfall

At the same time, it's ready to make a "large investment" in Tesla's latest cells.

STRINGER Japan / reuters

Panasonic has sold its entire stake in Tesla for $3.6 billion to raise cash for an acquisition, according to Nikkei and the Financial Times. At the same time, Panasonic CEO Yuki Kusumi told Bloomberg that the company plans to make a "large investment" in production of Tesla's new 4680 lithium-ion battery cells if a prototype production line works out.

Panasonic stressed that the share sale is around "corporate governance" and has nothing to do with its Tesla relationship. "The purpose is to review strategically-held shares following the corporate governance guidelines," it told the Financial Times in a statement. "It does not affect the partnership with Tesla and we continue to maintain good relationships."

In any case, the investment was certainly a canny business decision. Panasonic purchased 1.4 million Tesla shares at $21.15 in 2010 for about $30 million, as Engadget reported at the time. In March 2020, it had a stake worth 80.9 billion yen ($731 million), and eventually netted around 400 billion yen ($3.6 billion) by the end of March 2021 (Tesla's stock rose six-fold in that period). The sale proceeds will help Panasonic pay for its $7 billion acquisition of US AI supply chain specialist Blue Yonder.

Panasonic used to be Tesla's sole battery source, but Tesla recently started developing its own batteries and working with other suppliers including LG Chem and China's CATL. At the same time, Panasonic recently said it would reduce its reliance on Tesla and supply batteries to other global automakers.

Still, Panasonic is planning to remain a major part of Tesla's future. The company is setting up a prototype production line for Tesla's new 4680 lithium-ion cells revealed on its "Battery Day" event. CEO Elon Musk is hoping those will allow for cheaper battery packs that make a $25,000 electric car possible within three years. If its prototype production line works well, Panasonic will make a "large investment" in producing them for Tesla and other automakers.