Panasonic Holdings reported a 7% decline in its first-quarter operating profit, attributing this decrease to reduced sales in its battery-making energy unit and a drop in output at its automotive battery factory in Japan. Despite these challenges, the company maintained its profit forecast for the year. Operating income for the segment producing batteries for Tesla and other automakers fell by 27% year-on-year to $141.97 million. Overall operating profit for the quarter decreased to 83.7 billion yen. The energy unit incurred additional costs due to the construction of its automotive battery plant in Kansas, USA. This weaker performance highlights the impact of slowing demand for electric vehicles on the earnings of automotive battery manufacturers, particularly in the U.S.
The outlook for the EV sector in the U.S. remains uncertain due to the upcoming presidential election in November and potential future regulatory decisions affecting the industry. Panasonic Energy is working to expand its presence in North America, with a second U.S. plant in Kansas scheduled to begin production early next year, complementing another facility in Nevada that supplies batteries to Tesla. The unit faces competition from other Asian battery manufacturers, including China's CATL and South Korea's LG Energy Solution (LGES), which recently announced a forecasted revenue drop of over 20% for the year. Additionally, Panasonic Connect and Japan's Orix have announced a capital partnership agreement concerning the transfer of Panasonic's projector and display business.
