Panasonic’s battery division lowers profit forecast

The decline in production and the resulting lower profit expectation is said to be a temporary effect. In the medium and long term, Panasonic intends to stick to its plans for mass production of its new 4680 cells. Cell production at the Gigafactory 1 in Nevada is also continuing.

The background to the current measures is the low demand for the Tesla models S and X, for which Panasonic produces the round cells in Japan. In the US market, which is important for these models, the Model S and Model X do not qualify for the tax credits due to their high sales prices. Tesla’s luxury models are also ineligible for subsidies in other countries. “Since these are luxury cars that exceed this price, demand has fallen,” Panasonic CFO Hirokazu Umeda told investors and reporters. “We can expect a recovery, but we will not assume the kind of growth we see in the US at home.”

As a result, Panasonic has lowered its profit forecast from 135 billion yen to 115 billion yen. That is still the equivalent of about 720 million euros. Because outside of the Model S and Model X, business in Panasonic’s battery division is apparently in line with expectations. Production in the North American operations is stable, Panasonic says.

The Japanese company wants to stick to its plans for mass production of the new 4680 cells. The company is negotiating with Mazda and Subaru to supply battery cells and plans to quadruple its annual electric car battery cell production capacity to 200 gigawatt-hours by March 2031.

reuters.com, bnnbloomberg.ca, panasonic.com (PDF)