Japan's Panasonic Corp. said on Thursday it had invested 30 million dollars in Tesla Motors for a two per cent equity stake as it looks to cement relations with the US electric carmaker.
The investment comes as electronics firms and automakers increasingly look to collaborate as the market for electric cars and the batteries powering them heats up.
Panasonic is shifting its focus from home electronics -- which faces increasing competition and shrinking margins -- to the fast-growing and lucrative renewable energy and energy conservation business.
It recently raised its holdings in smaller rival Sanyo after securing a controlling stake last year in a deal that revamped Japan's troubled electronics industry.
By doing so, Panasonic gained access to Sanyo's coveted environmental technologies such as rechargeable batteries, increasingly in demand as more automakers embrace electric vehicles.
Tesla, which also counts Toyota as an investor, uses Panasonic in its advanced battery packs and has collaborated with the Japanese electronic giant on next generation battery cells designed specifically for electric cars.
Tesla has selected Panasonic as its preferred lithium-ion battery cell supplier for its battery packs among a network of various suppliers to the US carmaker, the companies said.
Panasonic's investment in Tesla was made through the purchase of common stock in a private placement at a price of 21.15 dollars per share, the two companies said in a joint statement.
"The investment builds upon a multi-year collaboration of the two companies to accelerate the market expansion of the electric vehicle," they said.
The investment means Panasonic now has a two-per cent equity stake in the small, Palo Alto, California-based firm, according to a Panasonic spokesman. Japan's auto giant Toyota has also invested 50 million dollars in the company.