Due to the impact of the city closure and the increase in the price of raw materials, Panasonic’s financial report suffered a huge loss of 39%

Tesla battery supplier Panasonic’s first-quarter financial report was released, and revenue fell 39% due to the impact of China’s lockdown and rising battery raw material costs.

Due to the impact of the city closure and the increase in the price of raw materials, Panasonic's financial report suffered a huge loss of 39%

Panasonic (Panasonic) is Tesla’s longest-term battery supplier, but compared with Tesla’s bright financial report, Panasonic is struggling. The first quarter (April-June 2022) reported a revenue loss of 39% , the expected profit was 544 million US dollars, but the actual profit was only 470 million.

“Although this quarter’s results seem unsatisfactory, we don’t think it will affect the full-year revenue target.” Panasonic Chief Financial Officer Umeda Hirokazu said that they judged that the annual profit target of 2.66 billion US dollars does not need to be adjusted.

Panasonic is not the only company affected by the closure of Shanghai. Although Tesla was also affected, the number of vehicles delivered had a negative growth for the first time, but the overall revenue still maintained a good performance. For battery suppliers, another impact is the impact of the war in Ukraine, because this is an important metal raw material producing area, including the most critical “nickel” of ternary lithium batteries.

With the rising prices of lithium, nickel, cobalt and copper ore, the cost of batteries naturally rises, which also drives the price of electric vehicles to keep rising. Many battery factory and mining bosses have called for automakers to invest in the local mining of battery raw materials in the United States in order to achieve supply chain autonomy without being constrained by foreign countries.

Panasonic recently announced that it will build a battery factory in Kansas, the United States, and will become the main source of supply for the Tesla factory in the United States in the future, including the latest 4680 batteries. In addition, Panasonic also said that next year they will start producing Tesla 4680 batteries at their Japanese factories for use in electric vehicles.

Due to the slow development of the domestic electric vehicle industry in Japan, Panasonic believes that by 2029, their battery production will increase by 3 to 4 times, mainly for the United States.