TOKYO, Oct 31 Reuters Japan39;s Panasonic Holdings said on Thursday secondquarter operating profit rose 42 at its batterymaking energy unit, as stronger sales of energy storage systems for data centres offset falling demand for automotive batteries.

Operating income for the key segment, which makes batteries for Tesla and other automakers, rose to 32.7 billion yen 213.82 million, despite a decline in profit from the invehicle business.

The company retained its fullyear operating profit forecast for the unit at 109 billion yen, however.

Panasonic said the unit was grappling with lower sales in Japan and increased development costs for new customers, as well as rampup costs for factories in Kansas and Japan39;s Wakayama prefecture in the quarter.

Last month, Panasonic Energy said it had finalised preparations for mass production of its 4680 batteries in Wakayama to help automakers extend the driving range of EVs and use fewer cells to achieve the same battery pack capacity.

The unit has sought growth in the North American market by building a second U.S. plant in Kansas set to start production in early 2025 and with another factory in Nevada that provides batteries to Tesla.

It competes with other Asian battery makers such as China39;s CATL and South Korea39;s LG Energy Solution, which said on Monday it had a conservative view of revenue growth next year amid slowing EV demand.

Panasonic also maintained its fullyear profit forecast for its entire business at 380…