Panasonic has lowered its forecast for the 2018/19 fiscal year, which ends in March, following a decline in profits over the winter. However, the Energy division, which also includes the battery business with Tesla, recorded its first operating profit in three quarters at 131 million euros.
The Japanese company cites the trade dispute between the USA and China as the reason for the lowered forecast, which caused demand for automotive components and factory equipment, among other things, to fall.
In detail, Panasonic forecasts a profit of 385 billion yen (around 3.06 billion euros) for the 2018/19 fiscal year ending in March. The original target was 425 billion yen (approx. 3.38 billion euros). Operating profit in the last quarter (October to December) fell by 19 per cent to 97.6 billion yen (approximately 777 million euros).
So while the quarter looked a little gloomy, comparably, the battery business, on the other hand, delivered and generated said profit for the first time in three quarters. This was not least due to the partnership with Tesla returning some fruits. “Sales and profit at the Tesla business have improved,” says CFO Hirokazu Umeda. This division was able to generate a profit of 16.5 billion yen (131 million euros).
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The currently still exclusive supplier of battery cells for the Tesla power supplies had already suffered an operating loss in the second quarter of the current financial year due to the production delays at Gigafactory 1. However, Umeda was already forecasting profits from October due to then getting production of the Tesla Model 3 up to speed. This forecast has now been met. And according to CFO Hirokazu Umeda, additional production lines are to be installed in the Gigafactory in Nevada by the end of March, increasing the total capacity of the plant to 35 GWh.
No decision has yet been made as to whether Panasonic will also supply battery cells to Tesla’s China plant. Only recently there were rumours that Lishen could be switched in as a potential cell supplier for the Gigafactory 3 in Shanghai.
And while Tesla may be Panasonic’s brightest spot, for now, the Japanese continue to reach out to other carmakers as well, most notably Toyota. They are to establish a joint venture for prismatic battery cells in 2020 reportedly.
Additional reporting by Nora Manthey.