Panasonic Corp.'s overall improving outlook in its fiscal 2018 ending March 31 is masking weaker-than-expected performance for its rechargeable battery business.
The supplier of lithium-ion battery cells for Tesla Inc.'s electric cars and storage systems, Panasonic on Feb. 5 downgraded its previous full-year operating profit forecast for its battery division of ¥6.6 billion, or $60.1 million, to a ¥5.4 billion operating loss.
Citing a "six-month production delay" for Tesla's mass-market Model 3 electric sedan, which is slowly rolling out at the joint venture partners' "Gigafactory" near Reno, Nev., the battery unit's results "will be revised downward for sales and operating profit, in line with revising the sales plan for the automotive battery business in North America," Panasonic CFO Hirokazu Umeda told analysts on a conference call.
The Japanese electronics giant now expects lithium-ion battery sales of ¥426.5 billion for the year, ¥45 billion under its previous forecast. Panasonic posted a ¥1.3 billion operating loss for its battery unit in its fiscal third quarter ended Dec. 31, 2017, on sales of ¥109.8 billion. For the first nine months of its fiscal 2018, the division generated ¥9.7 billion in operating losses on ¥303.9 billion in sales.
Despite the challenges, battery sales gained ¥39.2 billion through the first nine months of the fiscal year, though operating profits shed ¥14.2 billion. "Sales for this fiscal year will be pushed back, but strong demand for automotive batteries continues in North America," Umeda said.
Bloomberg New Energy Finance estimates the sale of roughly 300,000 electric vehicles in North America in 2018, after reaching over 200,000 in 2017. The research firm expects worldwide electric vehicle sales in 2018 of about 1.5 million, up from 1.1 million in 2017.
Umeda declined to say whether battery operating profits would return to the black for its next fiscal year, saying only, "We believe that red figure can be minimized from now on." Panasonic, which supplies cylindrical battery cells to Tesla, is exploring a partnership with Toyota Motor Corp. to produce prismatic batteries.
As of Feb. 5, US$1 was equivalent to ¥110.09.
