Panasonic Holdings said its battery and energy division is expected to deliver a sharp profit recovery in the current financial year after reporting a quarterly loss tied to tariffs, factory startup expenses, and softer sales.
The company forecasts operating income for its energy segment to reach 171 billion yen, or roughly $1.09 billion, in the fiscal year ending March 2027. That would represent more than double the 69.8 billion yen recorded during the previous fiscal year.
The energy division remains one of Panasonic’s most strategically important businesses because of its role supplying batteries to electric vehicle manufacturers, including Tesla.

Quarterly Loss Driven by Tariffs and Factory Costs

Panasonic’s energy business reported an operating loss of 3.8 billion yen during the January-to-March quarter.
The company said the decline was primarily caused by several temporary pressures affecting profitability.
Among the biggest factors were US tariff impacts, startup costs associated with Panasonic’s new battery manufacturing facility in Kansas, and weaker battery sales at one of its factories in Japan.
The Kansas facility represents a major expansion initiative designed to strengthen Panasonic’s North American battery production capacity as electric vehicle demand continues growing.

Tesla Partnership Remains Strategically Important

Panasonic continues to play a significant role within Tesla’s battery supply chain, particularly in North America.
The long-standing partnership between the two companies has become increasingly important as automakers race to secure battery production capacity amid rising global demand for electric vehicles and energy storage systems.
Expanding local production in the United States also aligns with broader efforts by battery manufacturers to reduce supply chain risks and navigate shifting trade policies.
The company’s investment in the Kansas facility is expected to support future production growth while positioning Panasonic to benefit from long-term EV adoption trends.

Battery Industry Faces Cost and Supply Challenges

The battery sector continues facing significant operational challenges despite strong long-term demand expectations.
Manufacturers across the industry are dealing with rising raw material costs, evolving trade restrictions, geopolitical uncertainty, and large capital expenditures tied to new factory construction.
At the same time, governments in the United States, Europe, and Asia are increasingly encouraging domestic battery production through subsidies and industrial policy initiatives aimed at reducing dependence on overseas supply chains.
Panasonic’s forecast suggests management expects many of the recent temporary pressures on profitability to ease over the coming year.

Outlook Reflects Confidence in EV Demand

The company’s outlook signals continued confidence in the long-term expansion of the electric vehicle market and broader electrification trends.
As automakers increase EV production and governments continue supporting clean-energy initiatives, battery suppliers such as Panasonic are expected to remain central players in the global energy transition.
Investors will likely continue watching battery production volumes, factory ramp-up progress, and future Tesla demand trends as key indicators for Panasonic’s energy business performance throughout fiscal 2027.