TOKYO, May 10 Reuters Japan39;s Panasonic Holdings Corp on Wednesday said it expects net profit to rise to a record high this year on robust auto battery sales and a hefty tax credit in the United States.

The industrial conglomerate, which supplies batteries to U.S. electric vehicle EV leader Tesla Inc, is expanding its energy business just as persistently high inflation rates worldwide dampen consumer sentiment.

Panasonic predicts net profit will grow 32 from a year earlier to a record 350 billion yen 2.59 billion as it expects a tax credit for EV battery operations under the U.S. Inflation Reduction Act to boost its bottom line by 100 billion yen.

The net profit outlook would be up 23 from the prior record of 284.1 billion yen, set in the year ending in March 2019.

In another factor to drive its profit, the Osakabased company, whose products range from rice cookers to industrial robots, expects far less headwind this year from higher material prices and components shortages. Over the past two years, we were greatly affected by a surge in raw material prices and a lack of parts and semiconductors. But those negative effects will largely go away this year, Panasonic Group CFO Hirokazu Umeda told a briefing.

The company sees operating profit of 430 billion yen for the year through March 2024, versus 288.6 billion yen a year earlier. That beats the 383.96 billion yen average of 20 analyst estimates compiled by Refinitiv.

Panasonic expects operating profit at its…