Panasonic Corp reported the first quarterly profit in its US battery business with Tesla Inc on Monday, after several years of production troubles and delays at the US partner.
The news comes after the US electric vehicle maker reported its second successive quarterly profit last week, as vehicle deliveries hit a record. Tesla also said it would comfortably make more than half a million units this year, pushing its shares to new highs.
"We are catching up as Tesla is quickly expanding production," Panasonic's Chief Financial Officer Hirokazu Umeda told an earnings briefing, referring to battery cell production.
"Higher production volume is helping to push down materials costs and erase losses." Panasonic first invested in Tesla in 2010 and announced its partnership in building the US firm's Gigafactory plant in Nevada in 2014 as part of its strategic shift from low-margin consumer electronics to automotive components.
But as its $1.6 billion Gigafactory investment failed to produce solid returns, Panasonic has grown cautious about its battery business with Tesla.
It chose not to build a new battery plant for Tesla in China, ceding its battery cell monogamy as Tesla entered into a partnership with South Korea's LG Chem Ltd and China's CATL.
Panasonic is turning to Toyota Motor Corp for battery partnership, setting up a joint venture for electric vehicle (EV) batteries in April. Panasonic said operating profit for the October-December quarter rose 3% to 100.4 billion yen ($915 million), beating analysts' estimates by 49%, thanks to the improvement at the Tesla battery business as well as cost cuts. It maintained its profit forecast for the year through March at 300 billion yen, above an average estimate of 295.14 billion yen by 20 analysts.
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