Panasonic forecasts 27.6% profit increase helped by battery orders from Tesla

Panasonic Corp forecasts its operating profit to surge by 27.6 percent to 330 billion yen this business year as economic recovery triggers increased demand for equipment and components, including automotive batteries used by Tesla.

The average forecast for Panasonic based on estimates from 16 analysts is 327.56 billion yen.

The Japanese manufacturer is looking to tap growing demand for electric car batteries in key markets such as the US and China through its partnership with Tesla Inc., which accounts for around 40 percent of automotive battery purchases.

Panasonic expects its automotive unit to post 50 billion yen in operating profit this business year, according to the company’s CFO Hirokazu Umeda.

The Japanese industrial conglomerate will also begin a test line to make large cylindrical 4680 format battery cells this business year.

According to Tesla, the format could store more energy, halve battery costs, and help increase battery production 100-fold by 2030.

Panasonic is also investing heavily in new production chain management services. Last month, the company announced that it would acquire more shares of US supply-chain software company Blue Yonder in a $7.1 billion deal.

For the March 31-ending quarter, Panasonic posted an operating profit of 31.8 billion yen, down 40 percent from a year ago due to weaker earnings of its unit that sells lighting, equipment, and materials for buildings.

That result surpassed the 20.99 billion yen average profit estimates from five analysts surveyed by Refinitiv.