The company cited a decline in the market for high-end electric vehicles in North America in lowering the operational profit estimate for Panasonic Holdings’ (6752.T) automotive battery division by 15% on Monday.
The company’s less optimistic assessment of its battery business follows an increasing number of automakers’ and suppliers’ cautions about a potential blow to EV sales from the downturn in key economies, such as Europe and China.
For the energy segment that produces batteries for Tesla (TSLA.O) and other automobiles, Panasonic cut its full-year operating profit expectation from 135 billion yen to 115 billion yen ($769 million).
On Monday at 0900 GMT, the group chief financial officer of Panasonic is scheduled to conduct a briefing about the company’s second-quarter profits. According to Panasonic, the U.S. Inflation Reduction Act has caused customer demand for high-end EVs to shift, which has negatively impacted the battery unit’s manufacturing in Japan. Panasonic made this announcement in a presentation that was made available on its website.
According to the papers, Panasonic reported sustained sales of cars qualified for tax incentives and consistent production at its North American facilities.
This move could be a wise move to preserve long-term profitability and provide Panasonic with a competitive advantage as it navigates the complicated battery market. Adaptability is essential for success in an industry that is known for innovation and quick change, and Panasonic’s choice to update its profit projection demonstrates its commitment to being at the forefront of the battery business.
Comment Template