Panasonic reported on Wednesday a 44% plunge in first-quarter operating profit, as a result of the U.S.-China tensions.
Panasonic, the exclusive battery cell supplier for Tesla, posted an operating profit of 56.39 billion yen ($519.68 million) for the April-June quarter, down from 99.96 billion yen a year prior.
"This is due mainly to lower sales in China, increased costs related to development expenses in Automotive Solutions and sluggish sales of TVs, in addition to impact of gains from the sale of land in the previous year despite favorable sales of domestic housing-related businesses," according to Panasonic.
"Domestic sales was the same level as the previous year. Overseas sales decreased due mainly to sales declines of electronic-component-mounting-equipment and motors, which were impacted by deteriorating market conditions in China, and the effect of exchange rates despite sales growth in Automotive Batteries," Panasonic explained.
The company maintained its profit forecast for the year ending March at 300 billion yen.
During the three months ended June 30,2019, the company came to an agreement with Toyota Motor Corporation to establish a joint venture related to town development business.
In photovoltaic business, Panasonic reached an agreement to collaborate with GS-Solar (China) Company Ltd.
Production delays on Tesla’s mass-market Model 3 sedans have slowed a recovery of Panasonic’s investment in battery production at its Gigafactory joint venture with the U.S. electric car maker.
Last week, Tesla pushed back its profit timeline once again, reported lower margins and announced the departure of its chief technology officer.