Panasonic announced that it is slowing down its battery production amid weaker demand for electric vehicles, but it hints at demand from Tesla still being good on that front.
The Japanese electronics giant is Tesla’s longest-standing battery cell supplier.
It produces battery cells for electric vehicles in several factories in Japan, China, and in the US, where it also partners with Tesla to produce cells for Model 3 and Model Y vehicles at Gigafactory Nevada.
With the release of its earnings today, Panasonic announced that it was slowing down its battery production in Japan amid lower demand (via Reuters):
Panasonic Holdings, which supplies Tesla, said on Monday it had cut automotive battery production in Japan in the September quarter and shrank the division’s annual profit forecast by 15%, underscoring a global slowdown in EV sales.
The company said that it lowered production to achieve an “appropriate inventory level, in response to rapidly-reduced demand.”
The good news is that it only reduced production in Japan for global customers.
In the US, Panasonic says that demand remains steady:
Panasonic added its production at its North American operations remained steady, and it saw firm sales of vehicles eligible for tax credits.
The company didn’t elaborate on which customers contributed to the slowdown in demand and which didn’t.
Top comment by Steph Soltesz
The Real Throttle is the High Price Point EV demand is falling and people want More Affordable EV's under $40K USD (pre discounts). Interest Rates + Cost of Living inflation play a big part in this shift with consumers as well. The big ticket EV's are just not selling as anticipated & hence why GM & Ford have taken knocks on the head because of it. Simply look at those selling affordable models (BYD for example) and they are putting out a lot & making profit at it.
While production has temporarily slowed, Panasonic noted that batteries for electric vehicles are still an investment priority for the company.
Electrek’s Take
It sounds like Panasonic is only lightly applying the brakes temporarily, as macroeconomics issues have slowed down EV demand and new car purchases in general.
Considering that the vast majority of the company’s production in North America comes from its Gigafactory Nevada operations, and that’s apparently still going strong, this is a good sign for Tesla.
It looks like Tesla doesn’t plan to slow down Model 3 and Model Y production in North America anytime soon, or its battery orders to Panasonic would have slowed down.
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