Japanese multinational electronics firm Panasonic plans to boost its domestic electric vehicle battery production by more than twofold as it seeks to capitalize on the rapidly evolving market, Nikkei Asia reports.
Targeting new customers amid Tesla demand slowdown
Panasonic plans to double its electric vehicle battery production in Japan by the end of the decade to expand its customer base and boost the operation of its local factory.
According to the report, the Japanese battery maker has reduced the output of its domestic factory due to the waning demand from its major client Tesla.
“We are estimating our target for 2030 based on our demand from [potential] customers. Our challenge regarding the profit for the automobile battery business … comes from a huge drop in demand for batteries used in specific models.”
President and CEO Yuki Kusumi said in an interview with reporters on Tuesday
Now, Panasonic seeks to supply its batteries to other prospective automakers like Mazda and Subaru. As per the report, it is currently in discussions with these two Japanese OEMs about its cylindrical li-ion batteries.
Panasonic’s current output in its domestic factory
Panasonic currently has an annual battery production capacity of approximately 12 gigawatt-hours in Japan. In the United States, its capacity currently stands at about 38 gigawatt-hours per year.
In order to achieve a more than twofold boost in domestic capacity, President and CEO Kusumi said that the company is considering retooling some of its manufacturing lines in Japan.
By doing so, Panasonic can produce more advanced electric vehicle batteries that most automakers seek in the market today.
Profitability
Panasonic President and CEO Kusumi admitted that some aspects of the company lack “urgency” and “strict execution” to hit the internal profit target.
The company will highly likely miss its 10% return on equity and a 1.5 trillion yen cumulative operating profit target by March 2025.
It has also sold its automotive parts subsidiary to a US-based asset management firm. However, the company executive omitted to elaborate if the company would sell or reorganize its other business units.
“Selling businesses is not our goal.”
Panasonic President and CEO Kusumi
All that said, Panasonic and its group companies plan to examine each business units’ profitability. They aim to take necessary measures to optimize operations, such as switching managers or diverting their workforce to “more promising business areas.”
