Batteries are the lifeblood of any electric vehicle (EV), and for a company like Tesla (TSLA), scaling production means securing a steady, reliable supply of them. That’s where Panasonic (PCRHY) comes in. The Japanese electronics giant has been Tesla’s battery backbone for over a decade. Their partnership has helped fuel Tesla’s rise to the top of the EV chain.

But cracks may be forming. Panasonic just announced a major restructuring, cutting 10,000 jobs globally, about 4% of its workforce. The company is under pressure from rising costs, weak consumer demand, and aggressive Chinese competition. It is merging sales divisions, offloading unprofitable units, and absorbing a nearly $900 million restructuring charge. While EV batteries are not the stated target, any disruption at such a critical supplier raises questions.

If Panasonic is feeling the strain, could it be a warning for Tesla’s supply chain and TSLA investors?

About Tesla Stock

Tesla (TSLA), valued near $1 trillion, is the world’s most formidable automaker. Tesla has redefined industrial boundaries, melding electric mobility with energy systems, AI, and robotics. 

Tesla’s stock has hit turbulence in 2025. Trading nearly 35% below its December high of $488.54 and down 13.9% on a YTD basis, TSLA has underperformed its Mag 7 peers. Weighed down by waning EV demand, tariff tensions, and the polarizing presence of CEO Elon Musk, the stock faltered. 

Yet, in classic Tesla fashion, it is roaring back, rising 38% over the past month and 26% in just five days. This surge has reignited market faith, pushing its valuation higher and reaffirming its place among corporate giants.

Tesla’s Q1 Results Slip Below Forecasts

Tesla’s Q1 2025 earnings report on April 22 reflected a company grappling with more than just operational hiccups – it is a brand standing at a pivotal inflection point. Revenue slipped 9.2% year over year to $19.3 billion, while adjusted profit nosedived 39% to $934 million. EPS cratered 40% to just $0.27, all landing well below Wall Street’s projections.

Automotive revenue took a sharper 20% hit to $13.97 billion, dragged down by a 13% drop in global deliveries, totaling 336,681 units. While some blame factory retooling, steep demand erosion, especially in Europe and China, suggests deeper reputational cracks may be accelerating Tesla’s slide.

Meanwhile, Tesla’s grip on the EV throne is slipping - and fast. In Europe, sales collapsed by over 37%, even as the overall EV market grew. In China, the pressure mounted as BYD (BYDDY) and other domestic rivals kept eroding Tesla’s lead. Plus, in the U.S., Tesla’s market share tumbled below 50%, a sharp fall from the days when it ruled two-thirds of the EV space.

Then there’s the political baggage. Elon Musk’s alliance with Donald Trump and his controversial role leading the Department of Government Efficiency didn’t help. Public sentiment soured, and it showed.  

But Tesla is not out of ammo. With $37 billion in cash and reduced long-term debt, the balance sheet still showcases strength. The stock even jumped over 5% post-earnings as Musk promised to dial back his political commitments, telling investors he’ll limit public affairs to “a day or two a week.”

Tesla is leaning on two big bets: a lower-cost EV launching this year and Cybercab production by 2026. The long-awaited robotaxi pilot kicks off in Austin this June. With Full Self-Driving still needing supervision, this launch is high-stakes. 

Analysts tracking Tesla predict the EV company's EPS to drop by 31.9% year over year to $1.39 in fiscal 2025. But the rebound story kicks in fast, with projections calling for a sharp 73.4% surge to $2.41 in 2026.

Ripples at Panasonic, Shockwaves at Tesla?

Tesla and Panasonic’s alliance has long been foundational, spanning over a decade of battery innovation and Gigafactory-scale ambition. But Panasonic’s sweeping restructuring casts a long shadow.

While the 10,000-job cut – to be divided equally, affecting 5,000 employees in Japan and 5,000 overseas, primarily within the fiscal year ending March 2026 – mainly targets consumer electronics, the company’s EV battery business is not immune to market tremors. EV sales have slowed, margins have thinned, and even Panasonic’s U.S. operations, closely tied to Tesla, could face indirect impact, especially with potential tariff pressures and operational streamlining.

Panasonic has not specified cuts to the energy division, but fixed-cost overhauls and consolidation may disrupt coordination, scale, or delivery timelines. For Tesla, which leans heavily on timely, cost-efficient cell supply, any delay or inefficiency could ripple through production cycles. If Panasonic falters in agility or scale, Tesla might have to look elsewhere, or face headwinds itself.

What Do Analysts Expect for Tesla Stock?

Tesla has a “Hold” rating overall. Of the 41 analysts covering the stock, 16 recommend a “Strong Buy,” two have a “Moderate Buy,” 13 suggest a “Hold,” and the remaining 10 have a “Strong Sell” rating. While the EV stock is currently trading above its mean price target of $283.14, the street-high of $465 implies potential upside of 35%.

Panasonic’s cuts may not slice directly into Tesla’s lifeline, but tremors in the foundation rarely leave the walls untouched. If battery flow falters or margins tighten further, Tesla’s sleek acceleration into autonomy and affordability may grind against friction.