Panasonic Elevates Energy Unit’s Earnings Forecast Amid Strategic Reforms

Credit: Panasonic Energy

Japan’s Panasonic Holdings has revised its full-year earnings forecast for its energy division, a key battery supplier to Tesla, citing robust sales in energy storage systems and enhanced profitability at its U.S. battery facility. The company now anticipates a 14% increase in the segment’s operating profit, projecting it to reach 124 billion yen ($798.35 million). This adjustment follows a 39% year-on-year rise in operating profit for the unit during the third quarter.

The improved performance is attributed to heightened sales of energy storage solutions and favorable material costs, alongside better margins in its North American automotive battery operations. These gains have mitigated the impact of decreased automotive battery sales, which led to reduced production in Japan and increased expenses associated with new facilities in the U.S. and Japan’s Wakayama prefecture.

See also: Panasonic Energy Aims to Cut Dependence on China for U.S. EV Battery Production, Says Executive

In a separate strategic initiative, Panasonic aims to bolster group profitability by over 300 billion yen ($1.93 billion) and achieve a return on equity exceeding 10% by the fiscal year ending March 2029. The company plans to implement management reforms starting in the upcoming fiscal year, targeting a profit increase of more than 150 billion yen by fiscal 2026 and an additional 150 billion yen by fiscal 2028.

Panasonic Energy currently operates a battery plant in Nevada supplying Tesla and is expanding its North American presence with a second facility in Kansas, scheduled to commence production this year. Despite challenges such as reduced production and rising costs in Japan, the company maintains its full-year profit forecast for the entire group at 380 billion yen.

See also: Panasonic’s Battery Unit Sees 42% Profit Surge Amidst Market Challenges

The company faces competition from other Asian battery manufacturers, including China’s CATL and South Korea’s LG Energy Solution, which recently announced plans to reduce capital expenditure by up to 30% this year due to slowing growth in electric vehicle demand.

Panasonic’s strategic focus remains on enhancing profitability and expanding its market presence in the evolving energy sector.

Source: Reuters

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