GS Yuasa Shares Tumble as Additional Batteries Overheat
GS Yuasa Corp. (6674), the Japanese maker of the batteries that overheated and led to the grounding of all Boeing Co. (BA) Dreamliner planes, tumbled in Tokyo after separate lithium-ion incidents with Mitsubishi Motors Corp. cars.
The stock fell 11 percent, the most in five months, after Mitsubishi Motors said yesterday that a lithium-ion car battery caught fire and another melted -- both produced by a GS Yuasa unit. Mitsubishi Motors declined 3.9 percent to its lowest close in almost two months.
The incident occurs two months after a battery fire on a Japan Airlines Co. (9201) flight and the emergency landing of an All Nippon Airways Co. (9202) plane caused the grounding of all Boeing 787 Dreamliners globally from Jan. 16. A lithium-ion battery caught fire while being tested at a Mitsubishi Motors (7211) factory in Japan on March 18, while another melted in a separate incident last week, Mitsubishi said yesterday.
“With lithium-ion incidents spreading from airlines to automobiles investors are reacting excessively,” said Minoru Matsuno, president of Value Search Asset Management Co., a Tokyo-based investment advisory firm. “Still, with the lithium- ion business being only a limited part of Yuasa’s sales I don’t think it will have a very serious impact soon.”
The batteries were made by Lithium Energy Japan, a venture between GS Yuasa, Mitsubishi Motors and Mitsubishi Corp. (8058), which is separate from the factory where the Boeing 787 batteries were made, said Tsutomu Nishijima, a spokesman for Yuasa. Yuasa owns 51 percent of Lithium Energy, Mitsubishi Corp. owns 44.6 percent and Mitsubishi Motors holds 4.4 percent, according to Mitsubishi Motors spokeswoman Tomoko Kawabe.
The lithium-ion batteries were also made to different specifications from the Dreamliner battery, Yuasa’s Nishijima said. Boeing also separately said the battery is “fundamentally different from the 787 battery,” according to Marc Birtel, a spokesman for the plane maker.
U.S. and Japanese authorities are still investigating the cause of the overheated batteries on Dreamliners, and Japan said yesterday that it had found no concrete reason why the All Nippon Airways’ 787 battery failed.
Boeing earlier this month announced safety upgrades to the 787’s battery systems, including to the lithium-ion unit and charger, and said that may allow commercial flights to restart within weeks. The Chicago-based company said the fixes cover all possible scenarios for the cause and the actual reason may never be determined.
The planemaker said earlier this week it plans a final 787 test flight in “coming days” after taking the grounded Dreamliner aloft March 25 to evaluate fixes to the lithium-ion batteries.
GS Yuasa announced in 2009 that lithium-ion batteries for vehicles will become a core business for the company. It has four factories in Japan and makes lithium-ion batteries for Honda Motor Co. as well as Mitsubishi Motors and Boeing’s 787.
Honda and Yuasa produce batteries at their own factory, separate from Mitsubishi Motors, and have verified the safety of the batteries and the entire battery system, Kumiko Hashimoto, a spokeswoman for Honda said. The companies haven’t received any reports of accidents with the batteries, she said.
Mitsubishi Motors yesterday asked customers not to charge the plug-in hybrid Outlander vehicle externally until it identifies the cause of the problem. The car manufacturer has also suspended shipments of its Outlander PHEV vehicle until the cause of the battery incidents has been determined, Yuki Murata, a company spokesman, said.
“Mitsubishi was aiming to make the battery-powered vehicles a core part of their business so this is very bad news,” said Satoru Takada, a Tokyo-based auto analyst at Toward the Infinite World Inc. “Sales of the i-MiEV were not doing too well so this incident simply adds on to electric vehicles not selling.”
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