Panasonic cashes in on US demand for batteries

Tokyo — Japan’s Panasonic on Wednesday said it expects net profit to rise to a record high in 2023 on robust automotive battery sales and a hefty tax credit in the US. 

The industrial conglomerate, which supplies batteries to US electric vehicle (EV) leader Tesla, is expanding its energy business just as persistently high inflation rates worldwide dampen consumer sentiment.

Panasonic predicts net profit will grow 32% from a year earlier to a record ¥350bn as it expects a tax credit for EV battery operations under the US Inflation Reduction Act to boost its bottom line by ¥100bn.

The net profit outlook would be up 23% from the previous record of ¥284.1bn, set in the year to end-March 2019.

The Osaka-based company, which makes products ranging from rice cookers to industrial robots, expects far fewer headwinds this year from higher material prices and components shortages.

“Over the past two years, we were greatly affected by a surge in raw material prices and a lack of parts and semiconductors. But those negative effects will largely go away this year,” Panasonic Group CFO Hirokazu Umeda told reporters. 

The company sees operating profit of ¥430bn for the year through March 2024, versus ¥288.6bn a year earlier. That beats the ¥383.96bn average of 20 analyst estimates compiled by Refinitiv.

Panasonic expects operating profit at its energy unit, which manufactures batteries, to jump fourfold to ¥133bn this business year thanks to the tax credit and growing EV battery sales in the US.

The company makes EV batteries in the US state of Nevada and is building another battery plant in Kansas.

For the fourth quarter of the year ended March 31, Panasonic posted operating profit of ¥54.4bn. That compared with ¥83.4bn a year before and the ¥59.49bn average estimate of 12 analysts.

Reuters