Panasonic battery profits up 47%

Panasonic Energy, the company that makes batteries for electric vehicles, reported a 47% year-on-year increase in operating profit for the first quarter, to 31.9 billion yen, helped by rising demand for electric vehicles in the United States.

However, despite the positive momentum, the company expressed a pessimistic outlook for the future. The main reason is the trade restrictions imposed by the United States: a 25% tariff on lithium-ion batteries and a 100% tariff on Chinese electric vehicles could significantly slow down the industry.

An additional challenge for Panasonic is the development of its own battery production by Tesla, a key customer of the Japanese manufacturer. In 2023, Tesla’s capacity exceeded 100 GWh per year, which calls into question further contracts with Panasonic.

In the face of these changes, the company is seeking to diversify its production, in particular by targeting the market for industrial backup power sources for data centers. The growth of data centers, driven by the development of artificial intelligence, is creating demand for reliable solutions with uninterrupted power supply.

Today, China controls 75-85% of the world’s lithium-ion cell production, making the United States dependent on imports. This creates risks of supply disruptions even with minor changes in trade policy.