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MarketScreener Homepage  >  Equities  >  Korea Stock Exchange  >  LG Chem, Ltd.    A051910   KR7051910008


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Panasonic to exit solar production at Tesla's NY plant as partnership frays

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02/26/2020 | 12:17pm EDT
FILE PHOTO: The Panasonic booth is shown during the 2020 CES in Las Vegas

Panasonic Corp said it would exit solar cell production at Tesla Inc's New York plant, the latest sign of strain in a partnership where Panasonic's status as the U.S. electric vehicle (EV) maker's exclusive battery supplier is ending.

The move increases uncertainty over Tesla's solar business which is already under scrutiny, having been drastically scaled back since the U.S. firm bought it for $2.6 billion in 2016.

Tesla has informed New York that Panasonic's withdrawal "has no bearing on Tesla's current operations", the state said in a statement. The company employs over 1,500 jobs in the city of Buffalo, clearing its 1,460 commitment before April - and thereby avoiding a $41 million penalty - the state said.

Panasonic said in a statement on Wednesday that it would cease production by the end of May and exit the factory by the end of September.

The withdrawal comes as Panasonic scrambles to divest of unprofitable businesses as its strategic shift to components from consumer electronics struggles to drive profit growth.

It is also another sign of a fraying partnership with the U.S. EV maker, which is set to diversify its battery supplies to include South Korea's LG Chem Ltd and China's Contemporary Amperex Technology Ltd (CATL).

Panasonic said it would continue its automotive battery joint venture with Tesla in the U.S. state of Nevada, which just reported its first quarterly profit after years of production problems and delays.

In the solar business, low demand from Tesla has left Panasonic sending most of the cells it makes in Buffalo to overseas clients, instead of selling them to Tesla for its trademark Solar Roof - cells designed to resemble regular roof tiles - as initially intended.

When announcing the solar partnership in 2016, Panasonic said it would invest over 30 billion yen ($271.96 million) in the Buffalo plant. Tesla's long-term purchase commitment was part of the deal.

Panasonic, which employs about 380 workers at the plant, said that the U.S. partner "hopes to hire as many qualified Panasonic applicants as possible to help fill job openings for its growing operations in Buffalo."

The latest decision will have no significant impact on Panasonic's annual profit forecasts, according to a company spokeswoman.

Panasonic has already shrunk its own solar business elsewhere as it contends with competition from cheaper Asian rivals, selling its solar panel plant in Malaysia and research arm to China's GS-Solar for an undisclosed amount last year.

Shares of Panasonic closed down 0.9%, while the benchmark share price index <.N225> ended down 0.8%.

(Reporting by Makiko Yamazaki in Tokyo and Nichola Groom in Los Angeles; Editing by Shri Navaratnam and Christopher Cushing)

By Makiko Yamazaki and Nichola Groom

Stocks mentioned in the article
ChangeLast1st jan.
AUTOBACS SEVEN CO.,LTD. -1.97% 1246 End-of-day quote.-1.35%
BUFFALO CO.,LTD. 1.02% 986 End-of-day quote.1.02%
CONTEMPORARY AMPEREX TECHNOLOGY CO., LIMITED 0.91% 120.39 End-of-day quote.0.10%
GS HOLDINGS LIMITED 0.00% 0.42 End-of-day quote.0.00%
LG CHEM, LTD. 0.66% 305000 End-of-day quote.-0.49%
PANASONIC CORPORATION -1.54% 825 End-of-day quote.-1.32%
TESLA, INC. 5.62% 480.01 Delayed Quote.14.74%
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Financials (KRW)
Sales 2020 33 296 B
EBIT 2020 1 383 B
Net income 2020 810 B
Debt 2020 9 609 B
Yield 2020 1,24%
P/E ratio 2020 26,5x
P/E ratio 2021 15,3x
EV / Sales2020 635x
EV / Sales2021 541x
Capitalization 21 128 B
Duration : Period :
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Technical analysis trends LG CHEM, LTD.
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Income Statement Evolution
Mean consensus BUY
Number of Analysts 31
Average target price 405 774,19  KRW
Last Close Price 291 000,00  KRW
Spread / Highest target 85,6%
Spread / Average Target 39,4%
Spread / Lowest Target -21,0%
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Hak Cheol Shin Vice Chairman & Chief Executive Officer
Okdong Son President
Jin-Soo Park Vice Chairman
Ho-Young Jeong Director, Chief Operating & Financial Officer
Ki-Soo No CTO & President-Executive Board
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1st jan.Capitalization (M$)
LG CHEM, LTD.-0.49%18 229
DOW INC0.00%21 716
COVESTRO AG-35.20%5 600