Japanese electronics conglomerate Panasonic Corp said on Thursday it expects operating profit to increase 11.7 percent in the year through March 2019 as sales of automotive batteries expand.
Panasonic has been shifting away from low-margin consumer electronics to products targeting corporate customers such as automotive cockpit systems and batteries.
Panasonic, the exclusive battery cell supplier for Tesla Inc’s mass-market Model 3 electric car, forecast profit of 425 billion yen ($3.87 billion), from 380.54 billion yen a year prior.
Panasonic expects profit at its automotive energy business, which includes batteries, to more than double after production delays in the Model 3 pressured profit in the previous year.
Tesla earlier this month promised to meet its production target of 5,000 Model 3 cars per week by the end of June.
Mizuho Securities in a report this week estimated Panasonic’s battery sales to Tesla at around 100 billion to 110 billion yen for existing vehicles and several tens of billion yen for Model 3 cars built at Tesla’s so-called Gigafactory.
Panasonic sees batteries as central to its plan to nearly double automotive business revenue to 2.5 trillion yen by the year through March 2022.
To reduce the risk of over-relying on Tesla, Panasonic has also teamed up with Toyota Motor Corp to jointly develop batteries for electric vehicles.