Panasonic: Energies on a Growth Path Despite Challenges

The news from Tokyo is encouraging for Panasonic: In the second quarter, the energy sector of the Japanese technology giant recorded an impressive 42 percent increase in operating profit. This success is primarily attributed to the increased demand for energy storage systems for data centers, which was able to offset the decline in demand for batteries in the automotive sector. Despite the decrease in profits in the automotive battery sector, the energy division, which also supplies Tesla, was able to increase its operating profit to 32.7 billion yen. However, the forecast for the operating profit for the entire fiscal year remains unchanged at 109 billion yen. At the same time, Panasonic faces challenges in Japan: the domestic market is weaker, coupled with rising development costs for new customers and start-up costs for new production facilities in Kansas and Wakayama Prefecture. Nonetheless, preparations for mass production of the new 4680 batteries in Wakayama are progressing to increase the range of electric vehicles and further enhance efficiency. Moreover, Panasonic is strengthening its position in the North American market with a new plant in Kansas, slated to commence production in 2025, and an existing factory in Nevada that produces batteries for Tesla. In this dynamic market, Panasonic competes with Asian giants like CATL from China and LG Energy Solution from South Korea—the latter expects rather moderate revenue growth next year due to the flattening demand for electric vehicles. For the overall company, Panasonic is maintaining its annual profit forecast of 380 billion yen, underscoring confidence in the robust development of the group.