Panasonic wants a piece of the car industry: what the Japanese are developing

Panasonic will invest $ 5 billion in EV software batteries as the supplier looks for new ways to grow.

Panasonic will invest $ 4.9 billion in car batteries, supply chain software and other areas that the company believes are critical to its growth.

The supplier will invest 400 billion yen in growth segments, including cells for electric vehicles, and another 200 billion yen in technology, such as hydrogen devices, for three years until fiscal year 2024, according to a statement from Friday.

Panasonic also aims for a cumulative operating profit of 1.5 trillion yen during this period.

Panasonic, a 104-year-old Japanese company that used to drive global consumer electronics sales, is looking for new ways to grow.

Former CEO Kazuhiro Tsuga spent nearly nine years giving up on troubled businesses such as plasma TVs before handing over the reins to Yuki Kusumi a year ago.

Kusumi, the head of a weaker non-profit company, is now facing the challenge of driving Panasonic on a steady growth path.

He spent the past year turning it into a holding company, which the CEO says will make it easier to decide where to invest for long-term growth.

When it came to defining growth areas, Panasonic “considered what the company will look like in 2030 and looked at it from there,” Kusumi said in a briefing.

Panasonic is looking to diversify your business

One of those growth areas is the Panasonic business, which supplies batteries for electric vehicles. The manufacturer is in talks over a US plant where it plans to build next-generation 4680 batteries for Tesla and possibly other carmakers. The multi-billion dollar plant could start operating in 2024.

Panasonic also sees opportunities in supply chain software. Last year, it spent $ 7.1 billion to buy Blue Yonder, one of the Japanese company’s largest acquisitions.

Arizona-based Blue Yonder manufactures supply chain management tools and uses artificial intelligence to predict product demand. The idea is to package Blue Yonder solutions with Panasonic hardware, such as cameras and sensors, to provide customers with higher margin products.

Kusumi said in a June interview that he plans to spend two years “specializing and refining” Panasonic’s remaining business. Increasing efficiency during that period will increase the company’s ability to generate cash, releasing hundreds of billions of yen to target new initiatives, including mergers and acquisitions, he said.

Compared to previous results, Panasonic’s new operating profit target “looks ambitious,” Kusumi said. However, the company is working on “continuous improvement to achieve its goals,” he said, adding that in the past year it has gained “a common sense” of what the company needs to do to further develop its operations.