Tesla Shock TSLA Stock Takes a Dip as Panasonic Puts the Brakes on Battery Production

Tesla (TSLA) Stock Drops 5% as Panasonic Reduces Battery Production

Shares of Tesla Inc (NASDAQ: TSLA) took a nosedive on Monday, plummeting 4.79% after its battery supplier, Panasonic Holdings Corp (TSE: 6752.T), announced a staggering 60% cut in domestic electric battery production. It seems the Japanese electronics giant blamed slower than expected sales of certain models to Tesla for this downgrade.

But that’s not all! Tesla also missed Wall Street revenue expectations for the third quarter of 2023, delivering only $23.35 billion, while analysts were anticipating $24.1 billion. On top of that, their deliveries fell from 466,140 in Q2 to 435,059 in Q3, failing to meet the consensus of around 455,000. It’s safe to say that Tesla is feeling the pressure.

And who can forget the much-hyped Cybertruck model? Elon Musk himself had to gently break it to us that it could be a whopping 18 months before the Cybertruck starts generating the cash flow they’re hoping for. Talk about a delayed payday!

Now, let’s talk about poor Panasonic. They’ve been hit hard by Tesla’s struggles as well. First, they had to cut automotive battery production in Japan because, let’s face it, the higher-priced Tesla models like the Model S and Model X aren’t exactly flying off the shelves. In fact, they’re more like dusty relics in the showroom. Panasonic wants to maintain an “appropriate inventory level” to reflect this lackluster demand, and they estimate the reduction will last until at least March 2024.

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But wait, there’s more! Panasonic had to lower its full-year operating profit forecast for its battery unit from ¥135 billion to ¥115 billion. Why? Because the demand for Tesla EVs in North America has slowed down. It seems the American Dream doesn’t come with as much electric power as we thought.

However, in a plot twist, Panasonic’s CFO Hirokazu Umeda chimed in with a glimmer of hope, saying, “I think we can expect some recovery going forward.” Well, let’s hope he’s got his crystal ball gazing skills on point!

In the face of all these challenges, Panasonic is considering setting up a potential third factory in the US. Wow, talk about perseverance! They’re also planning to quadruple their global EV battery production capacity by 2031. Maybe they’re preparing for a future where Teslas become as common as squirrels on a city sidewalk.

Speaking of the US, Tesla is sticking to their guns and continuing production levels. They’re focusing on their more affordable Model 3 and Model Y cars. Apparently, higher-priced EVs may not qualify for tax breaks or incentives, so Tesla is keeping it real and accessible. Plus, let’s not forget the Inflation Reduction Act (IRA) signed by President Joe Biden, which impacted EV manufacturing. The IRA aims for a more sustainable and secure transportation future, ensuring stability in a market that was previously as unpredictable as a cat on roller skates.

So, buckle up fellow digital asset investors! The battle between Tesla and Panasonic continues, with twists and turns that no one could have predicted. Will Tesla bounce back? Will Panasonic recover and conquer new territories? Only time will tell. But one thing’s for sure, this rollercoaster ride is far from over, and we’re all just along for the thrilling, albeit bumpy, journey.

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