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Panasonic Reports Huge 39% Loss on Back of Lockdowns and Raw Material Price Hikes

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.

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

"Although this quarter's results seem unsatisfactory, we don't think it will affect the revenue target for the entire year." Panasonic Chief Financial Officer Umeda Hirokazu said that the company feels that the annual profit target of US$2.66 billion does not need to be adjusted.

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

With the rising prices of lithium, nickel, cobalt, and copper ore, the cost of batteries naturally rises, which also drives the rising price of electric vehicles. Many battery factory and mine owners 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 and will become the main source of supply for the Tesla factory in the United States in the future, including for 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.

（Image：Panasonic）

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