On Tuesday, Panasonic Corp raised its full-year operating profit forecast by more than 50% on the back of heightened demand for its batteries from pandemic-driven purchases of home appliances, sales of 5G equipment and Tesla Inc cars.
The strong performance in these segments offset losses for parts of its businesses that have been impacted by the coronavirus pandemic, including display panels and in-flight entertainment systems.
Incidentally, its new forecast of $2.2 billion (230 billion yen) for the year ended March 31, 2021, is still 22% below the previous year; however it is above its earlier estimate of 150 billion yen profit.
Following its decade-long partnership with Tesla, which was bruised earlier by troubles and delays, it is now beginning a profit driver.
In October 2020, Panasonic announced that it was developing a new battery cell designed by Tesla which it said would slash the cost of battery production; it had also said it would ramp up battery production by 100 times by 2030.
Panasonic is also planning to add a new battery production line at its Nevada factory it owns with Tesla, and is looking at building a lithium-ion battery business in Norway in a bid to tap European carmakers.
Panasonic’s strategic move to shift away from its low-profit home electronics business and instead focus on batteries for electric vehicles, car electronics and housing fixtures, has been overseen by outgoing Chief Executive Kazuhiro Tsuga.
In November 2020, Tsuga announced that he would be stepping down in April 2021 after nine years at the helm; he will be replaced by Yuki Kusumi, the current head of its automotive business.
For the three months ending December 31, 2020, Panasonic posted a 30% rise in operating profit to 130.2 billion yen.