Toyota-Panasonic JV Receives European Commission's Approval
Zacks Investment Research | Sep 16, 2019 09:20PM ET
Toyota Motor Corporation (NYSE:TM) and Panasonic Corporation’s (OTC:PCRFY) joint venture (JV) has been approved by The European Commission. The JV, set to come into effect from the next year, will be involved in the manufacturing and sale of prismatic automotive batteries along with research and development activities. The collaboration is in addition to the already existing agreement with Panasonic that offers lithium-ion prismatic batteries for Toyota’s vehicles.
Notably, Toyota will own a 51% stake in the JV while Panasonic will own 49%. The JV will provide Toyota with more advanced batteries, thereby ramping up vehicle production to expand its presence in the EV market. The JV also aims to supply batteries to Toyota's EV technology partners, Mazda Motor Corporation (OTC:MZDAY) and Subaru Corporation.
The deal will capitalize on the strengths of both companies, wherein Toyota will contribute know-how and market data related to EVs while Panasonic will contribute high-quality and extremely safe technologies.
Under the new collaboration with Toyota, Panasonic will transfer its prismatic battery manufacturing equipment and facilities to Japan and China. The shift will be cost-efficient and advantageous for Panasonic, aiding it to grow efficiently in the fast-growing EV market.
The arrangement will help Toyota to deal with the challenge of securing high-quality batteries and boost Panasonic's profit margins.
Toyota is using Panasonic batteries, designed for Tesla (NASDAQ:TSLA) electric cars, in its plug-in hybrids for the China market. The batteries have been installed in the new Corolla and Levin sedans that Toyota rolled out in China this year. Reportedly, Toyota ordered around 50,000 batteries that boosted Panasonic's battery plant in Osaka to full capacity.
While Toyota’s focus on electric and self-driving vehicles bode well, amplified labor costs, increased raw material costs and declining sales, particularly in North America, remain concerns for this Zacks Rank #3 (Hold) company. You can
Toyota Motor Corporation Price and Consensus
5 Stocks Set to Double
Zacks experts released their picks to gain +100% or more in 2020. One is a famous cutting-edge food company that is “hiding in plain sight.” Swamped with competitors and ignored by Wall Street, its stock price floundered. Now, suddenly, it acquired a company that gives it an advantage none of its peers have.
Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.