Panasonic anticipates huge profit jump; cites Tesla as the growth driver

One of the leading home appliances and consumer electronics producers, Panasonic Corp. is expecting a huge operating profit jump by almost a third this business year as the economic recovery from COVID-19 pandemic lockdown is accelerating the demand for components and equipment, including automotive batteries used by Tesla.

Considering this upscale, Panasonic has regarded Tesla batteries as the growth driver and considers it to be a significant part of the profit share.

According to credible reports, Panasonic expects the overall operating profit to rise by 27.6% to 330 billion yen; a figure which is slightly higher than an average forecast of 327.56 billion based on the estimates put forth by 16 analysts.

Most importantly, the Japanese electronics manufacturer is also looking forward to tapping the burgeoning demand for electric car batteries in key markets like the United States and China through a decade-old collaboration with Tesla. For the record, Tesla accounts for about 40% of Panasonic’s automotive battery portfolio.

Commenting on the estimated growth numbers, Panasonic CFO, Hirokazu Umeda cited that the company forecasts the automotive unit to surpass 50 billion yen in operating profit.

Umeda further mentioned that Panasonic is all set to begin a test line in Japan to develop large cylindrical 4680 format battery cells.

Speaking on the proposed development, Tesla quoted that the format is expected to store more energy, reduce the battery costs by half, and significantly ramp up the battery production 100x by 2030.

In line with these advancements, Panasonic has also announced its plans of investing hefty amount in new production chain management services such as its supply chains following the pandemic disruptions.

For the uninitiated, the Japanese consumer electronics conglomerate was also in talks with Blue Yonder, the U.S supply-chain software firm, to take over a major share in the company in a $7.1 billion deal.

Source Credit: https://www.reuters.com/business/panasonic-forecasts-profit-28-profit-jump-economic-rebound-2021-05-10/#:~:text=BusinessPanasonic%20forecasts%20profit%20jump%20helped%20by%20Tesla%20batteries&text=%22The%20automotive%20batteries%2C%20which%20are,billion%20yen%20(%243%20billion)