Panasonic looks to expand Tesla partnership into self-driving technology

The relationship between Tesla and Panasonic continues to deepen after the Japanese electronics maker announced today that it will shift focus to the automotive business. In specific, Panasonic who’s been a long time partner and investor in Tesla’s Gigafactory plant where it jointly produces lithium-ion battery cells with the electric car maker and energy company, aims to develop sensors and components for use in self-driving applications.

Chief Executive Officer Kazuhiro Tsuga said in an interview on Thursday, “We are deeply interested in Tesla’s self-driving system,”. Adding, We are hoping to expand our collaboration by jointly developing devices for that, such as sensors.”

The announcement by Panasonic is seen as a move that will ultimately link the company as a leader in autonomous technology, co-developed with strategic partner Tesla. Just today, Morgan Stanley upgraded Tesla’s rating to an overweight, citing reduced risk for the company in the field of self-driving technology and a strong outlook for Model 3 launch. In the face of stiff competition from Asian manufacturers producing low-cost consumer electronics, Panasonic Corp is shifting out of the low-margin sector and placing emphasis on expanding its business into the growing tech-heavy automotive vertical.

Tsuga spoke last year of Panasonic’s goal to divert its attention to the electric car market. “We are seeing strong demand for EV (batteries) not just from Tesla but various other automakers,”. Tsuga added, “We see the rechargeable battery business as the biggest growth driver. So we are aggressively making upfront and strategic investment here.”

Panasonic, in conjunction with Tesla, have begun mass production of high performance ‘2170’ lithium-ion battery cells for Tesla’s Powerall and Powerpack energy storage systems at the $5 billion Gigafactory, which Panasonic invested $1.6 billion into. Production of Model 3 batteries will begin in the second quarter of this year.

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