Tesla Cheats with New Battery Supplier, Panasonic Forecast Plunges

Panasonic wasted no time lowering its guidance after its bread-and-butter customer, Tesla, announced it was buying another battery supplier to power its electric vehicles.

The lucky company Tesla chose to replace Japan-based Panasonic is California-based Maxwell Technologies.

On the news, Panasonic lowered its profit expectations by 9%. The possible loss of Tesla isn’t the only culprit that led to the lowered guidance. The struggling tech player revealed it was also being hurt by weak demand in China for auto components and factory equipment. China’s slowing economy and the overhang of trade wars have weighed on countries and tech companies all over the world.

Musk Praised Panasonic Just Three Months Ago

Back in November, it appeared that the partnership between Tesla and Panasonic was going well. CEO Elon Musk took to Twitter to sing the praises about Panasonic helping it boost profits.

Here’s the tweet.

However, Musk had other plans. CCN raised the caution flag on Panasonic last month. We pointed to Tesla’s November indication that it would diversify its sources after experiencing several problems with its Model 3 supply chain.

On the heels of that announcement, rumors swirled that Tesla was on the lookout for a new battery supplier.

In previous reports, CCN noted that Panasonic was also feeling the effects of the possibility of losing Tesla. Its stock price was down by more than 2% on the news that the carmaker was looking for a new supplier.

Tesla Giveth Then Taketh Away

Elon Musk | Source: Shutterstock

Interestingly, when this supply agreement was announced, Tesla stated:

“The agreement supplies Tesla with Panasonic’s lithium-ion battery cells to build more than 80,000 vehicles over the next four years. It guarantees the availability of enough cells in 2012 to meet Tesla’s aggressive production ramp-up and fulfillment of more than 6,000 existing Model S reservations. This supply agreement helps ensure Tesla will meet its cost and margin targets for Model S.”

The purchase of Maxwell Technologies comes less than a decade since Musk and company inked the deal with Panasonic. The electric vehicle maker had lauded Panasonic as being a battery cell manufacturer and a diverse supplier to the global automotive industry.

Musk’s Always Up To Something, Could Be Good This Time

The move is a disappointing one for Panasonic, but it’s a solid one for Tesla, which has been under financial pressure.

In January, CCN reported that Tesla enjoyed a solid Q4 2018 with record production and delivery numbers driving the company’s first profit in two years. The company posted a net profit of $311.5 million and $891 million in free cash flow. However, the company’s stock price slumped 9% after it failed to meet investor targets for delivery and production numbers.

Tesla’s stock price has traded wildly over the past several months.

Owning battery supplier Maxwell should help the company lower its operating costs. The heavily indebted electric car company, whose CFO stepped down just four days ago, is making the acquisition in an all-stock deal.

A Tesla stock shorter (Musk has extreme disdain for them) responded to the Maxwell announcement with this tweet.

Maxwell already supplies batteries to General Motors and Volkswagen subsidiary Lamborghini. Specifically, it provides so-called ultracapacitors that store electricity and complement battery cells.


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Author: Tedra DeSue 
Image Credit: Featured Image from Shutterstock

Elon Musk’s Bad Week Gets Worse as SpaceX Lays off 600 People

SpaceX, the rocket company founded by Tesla billionaire Elon Musk, is laying off 10 percent of its 6,000-employee workforce. The layoffs are part of a move to streamline the business and cut costs.

“SpaceX must become a leaner company,” President Gwynne Shotwell wrote in a Friday email. The news was first reported by the Los Angeles Times.

‘Extraordinarily Difficult Challenges Ahead’

Shotwell explained:

This means we must part ways with some talented and hardworking members of our team. This action is taken only due to the extraordinarily difficult challenges ahead and would not otherwise be necessary.

The company is providing a minimum of eight weeks’ pay and other benefits to the fired workers.

SpaceX is streamlining to prepare for “difficult challenges ahead.” (Twitter)

Investors Dazzled by SpaceX

Elon Musk — the billionaire founder of electric-car company Tesla — launched SpaceX in 2002 to make space travel accessible to everyday people. In addition, SpaceX’s goal is to colonize Mars.

Equidate’s Robert Hilmer says SpaceX is one of the most valuable private companies in the world, with the potential to raise an “unlimited amount” of capital.

“SpaceX is one of [the most] popular pre-IPO tech companies globally,” Hilmer told CNBC.

Everywhere I travel around the world, investors of all types — individuals, family offices, hedge funds, sovereign wealth funds or private equity — want to get into SpaceX.

Meanwhile, Musk is taking the downsizing in stride.

He has not commented on the layoffs, preferring instead to focus on upcoming space launches.

The South African business mogul is more concerned that SpaceX’s newest test flight rocket has a cool, aerodynamic design.

“Obv must be more pointy tho,” Musk tweeted, in reference to the tip of the rocket.

Musk is an unwitting media darling who generates countless headlines. In August 2018, Musk stirred a volcanic backlash from Tesla investors after tweeting that he might take his car company private.

Weeks later, the SEC sued Musk for securities fraud, claiming his errant tweet caused Tesla stock to spike 6 percent that day. Shareholders were enraged when Tesla shares abruptly tanked in the following days.

The debacle forced Musk to step down as chairman in September 2018 and pay a $20 million fine to the SEC.

Elon Musk: I am Not Satoshi Nakamoto

Despite being a technophile, Elon Musk does not own crypto, as CCN reported.

“I literally own zero cryptocurrency, apart from .25 BTC that a friend sent me many years ago,” Musk confessed on Twitter.

In November 2017, Musk denied speculation that he was Satoshi Nakamoto, the inventor of Bitcoin. A former SpaceX intern inadvertently started the rumor with a blog post.

Sahil Gupta wrote at Medium: “Satoshi is probably Elon.”

Elon is a self-taught polymath. He’s repeatedly innovated across fields by reading books on a subject and applying the knowledge.

It’s how he built rockets, invented the Hyperloop (which he released to the world as a paper), and could have invented Bitcoin.

Musk responded by denying that he invented Bitcoin. Meanwhile, the real identity of Satoshi Nakamoto has never been confirmed.


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Author: Joseph Young
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