Overall, the automotive cylindrical battery business is profitable.

After a really challenging second quarter of 2020, the third quarter turned out to be relatively good for Panasonic. Despite the company noting a noticeable 15% decrease of revenues, profits and net income improved year-over-year.

To us, the most important thing is that the EV battery business is expanding and delivers profits.

Panasonic Q3 2020 results

Let's take a look at the general results first:

  • Sales: 1,667 billion yen ($16.0 billion) - down 15% year-over-year
  • Operating profit: 92.8 billion yen ($890 million) - up 11% year-over-year
  • Net profit: 58.7 billion yen ($560 million) - up 15% year-over-year
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Automotive

Our focus is on the Automotive category, which includes lithium-ion batteries for xEVs. The overall result was 3% lower than a year ago, but the sales of automotive batteries increased and the segment was profitable.

  • Sales: 358.5 billion yen ($3.44 billion) - down 3% year-over-year
  • Operating profit: 5.1 billion yen ($49 million); operating margin of 1.4%
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The Automotive Batteries subcategory shows increased sales, lowered costs and overall profitability of cylindrical battery business (both at the Tesla Gigafactory in Nevada and in Japan).

Panasonic supplies Tesla with:

  • 21700 cylindrical cell type for the Model 3/Model Y (produced at the Gigafactory 3 in Nevada)
  • 18650 cylindrical cell type for the Model S/Model X (imported from Japan to the U.S.)
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Unfortunately, as usual, there are no details about the xEV battery business unit, but we are optimistic about the future of electrification.