{"id":7175,"date":"2023-10-30T17:09:44","date_gmt":"2023-10-30T17:09:44","guid":{"rendered":"https:\/\/borrowaccelerated.com\/business\/panasonic-blames-lacklustre-tesla-demand-for-cut-to-profit-outlook\/"},"modified":"2023-10-30T17:09:44","modified_gmt":"2023-10-30T17:09:44","slug":"panasonic-blames-lacklustre-tesla-demand-for-cut-to-profit-outlook","status":"publish","type":"post","link":"https:\/\/borrowaccelerated.com\/?p=7175","title":{"rendered":"Panasonic blames lacklustre Tesla demand for cut to profit outlook"},"content":{"rendered":"<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=80a981a0-8801-4415-82e3-95286ef1a19e\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Panasonic, the Japanese electronics group, cut its full-year profit outlook at its battery unit by 15 per cent, blaming slower-than-expected sales of high-end electric vehicles at Tesla, one of its most important customers.<\/p>\n<p>The downgrade by Panasonic, which lowered its full-year operating profit forecast for its battery unit to \u00a5115bn ($771mn) from \u00a5135bn, was spurred by slowing demand in North America for Tesla EVs, which do not qualify for tax incentives under the Inflation Reduction Act.<\/p>\n<p>\u201cThe IRA has a price ceiling up to $80,000 and since the high-end models exceed that level, demand decreased,\u201d said Panasonic\u2019s chief financial officer Hirokazu Umeda on Monday.<\/p>\n<p>Umeda said that Panasonic had cut automotive battery production in Japan \u2014 where it produces the batteries for the more expensive Tesla models including the Model S and Model X \u2014 by 60 per cent compared with the first quarter as it tried to bring inventories back to normal levels.\u00a0<\/p>\n<p>Tesla has also placed less emphasis on its flagship models, withdrawing them from right-hand drive markets such as the UK, in order to push its more affordable Model 3 and Model Y cars.<\/p>\n<p>\u201cI think we can expect some recovery going forward. Still we did not expect big growth like what we see in the US plant. So we\u2019ll be running the Japan factory based on that assumption,\u201d Umeda added.<\/p>\n<p>The company also produces batteries for cheaper Teslas, which are benefiting from the IRA, at its Nevada factory.\u00a0Panasonic is investing billions to build a plant in Kansas.<\/p>\n<p>President Joe Biden\u2019s IRA has led to a flurry of investments in US battery manufacturing, though most new EVs made in the country do not yet qualify, either because they are too expensive or because their batteries are still imported.<\/p>\n<p>The cuts by Panasonic follow other warnings about EV demand globally. Tesla, General Motors and Ford have slowed down their EV factory expansions in expectation of weaker demand for cars owing to higher financing costs and weaker than expected economic growth in China and Europe.<\/p>\n<p>Last week South Korean battery producer LG Energy Solution echoed Tesla chief Elon Musk and warned EV sales were expected to weaken as a result of higher interest rates.<\/p>\n<p>Earlier in the month, Tesla\u2019s third-quarter revenue fell short of Wall Street\u2019s reduced expectations and its core profit margins sagged, as planned factory shutdowns and price cuts dented the US electric-car maker\u2019s performance.<\/p>\n<p>Panasonic\u2019s Umeda said on Monday that, in the second quarter to September, the car battery business made a loss if IRA subsidies were excluded. The unit recorded sales of \u00a5185bn, not including subsidies, compared with \u00a52.1tn for the entire group. <\/p>\n<p>Despite expectations that EV demand will improve in the US, Panasonic, which also makes a wide array of consumer and industrial electronics, cut its operating income forecast from \u00a5430bn to \u00a5400bn for the year to the end of March 2024 due in part to the impact of the slowdown in China. <\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/80a981a0-8801-4415-82e3-95286ef1a19e\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Panasonic, the&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-7175","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Panasonic blames lacklustre Tesla demand for cut to profit outlook | Borrow Accelerated<\/title>\n<meta name=\"description\" content=\"Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Panasonic, the Japanese\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/borrowaccelerated.com\/?p=7175\" \/>\n<meta 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