Panasonic says its battery business could be headed for a rebound, and Tesla appears to be a big part of the reason why.

The company expects stronger demand for its U.S.-made electric vehicle batteries as rising gas prices make electric vehicles more appealing to drivers.

Panasonic forecasted that demand for its U.S.-made batteries would rise by 19% up to 46 gigawatt-hours this financial year, per the Financial Times. The company added that the increase would occur despite the slow EV sales growth across the U.S.

Specifically, Panasonic claimed that the growth would be “supported by strategic customer’s recent recovery in market share.”

Tesla is widely understood to be this strategic customer. The battery maker stated that such growth could raise operating profit in its battery division to about $1 billion, representing a doubling when compared to the previous year, per FT.

That optimism follows a rough stretch. Panasonic’s yearly net profit dropped nearly 50% last year, with restructuring costs, tariffs, and a weak U.S. EV market weighing on results after the Trump administration scrapped electric car incentives.

Tesla’s sales numbers have also struggled. The automaker ended the first quarter with about 50,000 unsold vehicles, showing why any sign of a recovery is drawing attention.

If that demand materializes, it could help customers by supporting EV availability in the U.S. and reinforcing the long-term case for cars that are cheaper to fuel than gas models.

For drivers, a healthier battery supply chain can mean more dependable EV production and, over time, more choice in the market. If Tesla regains some momentum and Panasonic sells more batteries, that could help support domestic manufacturing in a segment that remains important to the U.S. transition away from gas-powered transportation.

That matters even more when fuel prices rise. Higher gas prices tend to make EVs look more attractive because they generally cost less to operate and maintain than comparable internal-combustion vehicles, especially for people who drive regularly.

Transportation also remains a major source of planet-warming pollution, so broader EV adoption can help reduce tailpipe emissions and improve local air quality, particularly when paired with cleaner electricity sources.

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