(Bloomberg) -- Panasonic Corp., the Japanese company that makes the batteries that power Tesla Inc.’s electric vehicles, predicted falling annual earnings on restructuring expenses and higher costs at its automotive business and other units.
The Japanese company said Thursday that full-year sales, operating income and net income will all decline. The company also cited falling sales at its industrial solutions business in China.
Last month, Tesla Chief Executive Officer Elon Musk tweeted that Panasonic was operating at a pace that’s constrained production of Tesla’s Model 3 sedan. On Thursday, CEO Kazuhiro Tsuga said Panasonic’s aim this year is to ramp up output before considering more investment.
“Batteries will run out if Tesla starts to sell the Model Y and expands its business next year,” he told reporters. “What will we do then? It’s one of a few topics to discuss with Tesla, including battery (production) in China.”
Tesla and Panasonic have been joined at the hip since the gigafactory agreement was first announced in July 2014, even if on paper they’re a bit of an odd couple. One is a 16-year-old maker of electric vehicles run by an impetuous boss, the other a century-old conservative Japanese manufacturer.
Shares of Panasonic were little changed in Tokyo before the company reported earnings. The stock has lost about 1% this year, giving the company a market of about $22 billion.
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