Panasonic Cuts Car battery Production As High-End EV Sales Drop

Tesla's supplier, Panasonic Holdings, revealed on Monday that it had reduced car battery production in Japan during the September quarter and lowered the division's projected annual profit by 15%, highlighting a global slowdown in EV sales.

The company's less optimistic assessment of its battery business comes in the wake of similar cautions issued by a number of automakers and suppliers due to slower growth in major economies like China and Europe, Nikkei Asia reported.

Some production lines have already halted in order to reduce the stockpile of EV batteries, and Panasonic’s domestic EV battery production cut will likely last until March 2024 at the soonest, its group CFO Hirokazu Umeda announced. “We are talking with many other potential domestic customers; we are thinking of many uses [for the battery capacity],” Umeda said.
During its most recent earnings call, the company revealed that it had reduced Japanese EV battery production by 60% from the prior quarter. Currently, Panasonic has factories in China, Japan, and the US where it manufactures EV batteries. In Nevada, it collaborates with Tesla to produce cells for the Model 3 and Model Y.

According to CarExpert, approximately 20% of Panasonic's global production is currently comprised of EV batteries produced domestically. Additionally, Umeda-san stated that it will not be raising output at its American facilities at this time.
Having opened its Gigafactory in 2017, Panasonic is one of the largest and most established manufacturers of EV batteries in the United States. Panasonic, along with LG Energy Solution of South Korea, has been among the biggest winners because the amount of the subsidy is based on actual production levels rather than planned production levels.