Panasonic Holdings’ energy unit missed its operating profit forecast for the last fiscal year due to lower production of electric vehicle (EV) batteries in Japan and a decline in sales of consumer products, the company said on Thursday.
Operating profit for the main segment, which makes batteries for Tesla and other automakers, was 88.8 billion yen ($570.18 million) in the year ended March, missing its own forecast of 113 billion yen, Panasonic said .
Auto battery makers have been hit by slowing demand growth for electric vehicles in the United States and Europe and cut-throat competition in China.
While the North American EV market is growing, the pace of growth has slowed due to a saturation of demand for early adopters, Panasonic said in presentation materials.
Operating profit is expected to rise 23% to ยฅ109 billion in the current fiscal year, the company said, adding that it expects demand to increase as more car models in affordable price ranges become available.
Panasonic Energy faces stiff competition from other Asian battery makers such as China’s CATL and South Korea’s LG Energy Solution.
Chinese battery makers have grown faster than their competitors, accounting for more than two-thirds of global EV battery capacity last year, according to data from consultancy Counterpoint Research.
Panasonic Energy has been trying to expand its footprint in the North American market. It has a factory in Nevada and has completed construction of a second factory in Kansas, which would bring its car battery capacity to 80 gigawatt hours per year.
Panasonic forecasts a 5% increase in operating profit for its entire business this year to ยฅ380 billion.
Operating profit fell 25% to ยฅ40.7 billion in the fourth quarter.
