EV Slowdown Impacts Toray’s Battery Business
The global electric vehicle industry is facing a new reality, and one major warning sign has just emerged from Japan’s advanced materials sector. Toray takes a $173M hit on its EV battery separator business after weak EV demand and intense competition shook its battery materials operations. The shocking write-down has raised fresh concerns about whether the EV supply chain is entering a difficult phase of slowing growth and shrinking profits.
From battery components to automotive plastics, the impact is spreading far beyond car manufacturers. Why is one of the world’s leading materials companies struggling despite the EV revolution? The answer reveals deeper cracks forming inside the rapidly changing electric mobility market.
Toray Takes $173M Hit Due to Weak EV Demand
The phrase “Toray takes $173M hit” has become one of the biggest talking points in the advanced materials industry this year. The company said slower-than-expected EV adoption significantly reduced demand for its lithium-ion battery separator films, which are critical components used inside EV batteries.
At the same time, aggressive competition in China created severe pricing pressure, making it difficult for suppliers to maintain profit margins. As a result, Toray takes a $173M hit on its separator film operations, signaling deeper challenges for battery material manufacturers globally.
Automotive and Carbon Fiber Segments Also Under Pressure
The impact of the EV slowdown was not limited to battery materials alone. Toray’s broader automotive resin business also suffered from reduced vehicle production and softer market conditions.
Meanwhile, the company’s carbon fiber division faced additional weakness outside the aerospace sector. Industrial applications such as wind turbine blades and pressure vessels experienced delayed recovery, pushing markets into what the company described as an “adjustment phase.” Because of these challenges, Toray takes a $173M hit while also reducing capital expenditure in its carbon fiber business by nearly half during the fiscal year.
Company Still Reports Strong Overall Earnings
Despite the setback, Toray reported an operating profit of 97.2 billion yen ($670 million) on total sales of 2.59 trillion yen ($17.8 billion) for the fiscal year ending March 31. Management remains optimistic that restructuring efforts and growth in other strategic business segments will help the company recover in fiscal 2027.
Although Toray takes a $173M hit today, the company believes long-term demand for advanced battery materials and sustainable technologies will eventually rebound as the global EV market stabilizes.
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