Panasonic's battery manufacturing division grew by 47% in cash over the year

Panasonic (remember that company?) has closed its first financial quarter. According to its results, the Panasonic Energy division, which is responsible for manufacturing batteries for electric vehicles, showed a 47% increase in operating profit compared to the same period last year. In absolute terms, the profit amounted to 31.9 billion yen. The main growth factor is the growing popularity of electric vehicles in the US. But this will pass soon.

The war is still a trade war

Despite the optimistic figures, Panasonic has made a pessimistic forecast for further growth. The main reason is that Trump's tariffs will strangle the industry. A 25% tax on lithium-ion batteries plus a 100% tax on Chinese electric vehicles will significantly slow down the industry. Moreover, Tesla is developing its own battery production. In 2023, their own production capacity exceeded 100 GWh. At any time, the long-standing Panasonic-Tesla contracts may be terminated.

So Japan is looking further into the future. The current boom in artificial intelligence has led to a sharp increase in powerful data centres. These new centres have to operate 24/7, so they need industrial backup power supplies just in case. Targeting these industrial installations is what allows Panasonic to diversify its production.

China currently controls 75-85% of the world's lithium-ion battery production. This means that the United States will not be able to suddenly completely abandon their products or impose unacceptably high taxes. However, due to the large volumes, even minor changes occasionally cause supply chain disruptions and missed deadlines.