Panasonic Reports Increased Profits in Q3 2024, Driven by Storage Battery Demand and AI Growth

Panasonic

Japanese Battery Maker Sees Strong Performance in Automotive and Storage Battery Segments Amid Growing AI Demand

Panasonic, a leading Japanese battery producer, reported a notable increase in profits for the third fiscal quarter ending December 31, 2024. The company posted a profit of ¥132.2 billion ($862 million), marking a 15% rise compared to the same period last year. This growth was primarily driven by stronger sales of its storage battery systems, especially to data centers, fueled by the rising adoption of generative artificial intelligence (AI) technologies.

Growth in Storage Battery Sales and AI Demand

Panasonic’s strong performance in the storage battery segment reflects the growing demand for energy storage solutions, particularly for data centers. The company did not disclose specific sales volumes but highlighted that AI's rapid growth has significantly contributed to increased sales of its storage battery systems. This aligns with global trends, where AI's demands for high-performance computing infrastructure are pushing data centers to invest in more efficient energy solutions.

In response to the strong growth in the storage battery sector, Panasonic has revised its full-year outlook. The company raised its profit forecast for its battery segment by ¥15 billion, now projecting ¥124 billion for the fiscal year ending March 31, 2025. Panasonic expects the demand for storage batteries driven by AI technologies to continue, further enhancing its financial outlook.

Automotive Battery Sales and US Production Facilities

Panasonic's automotive battery business also saw a significant boost, with profits increasing by ¥2.6 billion compared to the previous year. This growth was attributed to higher battery shipments from its Nevada plant in the United States, where improved productivity has helped meet the rising demand for batteries in electric vehicles (EVs). The company’s investments in new battery production facilities in Kansas and Japan’s Wakayama prefecture helped offset initial investment costs.

Despite the potential impact of recent US tariff hikes on imports from Canada and Mexico, Panasonic anticipates minimal disruption to its operations. The company emphasized that its major battery production bases, including those in Kansas, are located within the US, which should shield it from significant negative effects from these tariffs.

Confidence in the Global EV Market

Looking ahead, Panasonic remains confident in the global EV market's growth, despite potential slowdowns in certain regions. The company believes that the overall expansion of the electric vehicle market will continue, regardless of fluctuations in growth rates. Panasonic's strategy of investing in battery production only in response to confirmed client demand ensures that the company will likely achieve a solid return on its investments, positioning it well for future growth.

In conclusion, Panasonic’s impressive performance in Q3 2024 underscores its strong position in the battery industry. With a robust outlook for storage batteries driven by AI and sustained growth in its automotive battery sector, Panasonic is poised for continued success.