What is Panasonic's chance of winning?

EV battery investment competition March 10, 19:27

The shift to EV = electric vehicles is accelerating among automobile manufacturers around the world.

Meanwhile, demand for lithium-ion batteries for EVs is growing rapidly.

Manufacturers in China, South Korea, and other countries are accelerating their investment in order to produce high-performance batteries at the lowest possible price.

In the midst of fierce international competition, we will approach what kind of strategy Panasonic, Japan's largest in this field, is envisioning.

(Osaka Broadcasting Station reporter Tomokazu Kogi)

Expectations for Panasonic "4680"

Although it is an inorganic name like the "4680" (Yonroku Hachimaru) symbol, it is actually the name of a new type of in-vehicle battery developed by Panasonic.

It is a cylinder with a diameter of 46 mm and a length of 80 mm, and its diameter is more than double that of the conventional one.

It is expected that the cruising range of EVs will be significantly extended (about 20% compared to conventional batteries).

If you run 600km on a single charge, it will grow to 720km even with the same capacity.

This February.

At a press conference, Panasonic CFO Hirokazu Umeda announced that a new production line will be set up for mass production at a factory in Wakayama Prefecture for this "4680".

The investment amount is estimated to be about 70 to 80 billion yen, and we would like to start mass production in the latter half of 2023 while proceeding with verification work.

However, it must be said that the scale and speed of such investment are inferior to those of rival companies trying to ride the wave of EV shift.

China and South Korea continue to lead development competition and continue to invest huge amounts of money

As the EV shift accelerates worldwide, China and South Korea are driving the competition for developing lithium-ion batteries for EVs.

We are accelerating our business with huge investments, and our market share is also increasing significantly.

Especially strong is China's CATL (Ningde era), the world's top manufacturer of in-vehicle batteries.

Sales related to Chinese automobile manufacturers still account for 80%, but it has grown to supply batteries to Tesla in the United States, BMW in Germany, and Honda in Japan.

We are investing hundreds of billions of yen one after another to build a factory.

The second-placed Korea LG Energy Solutions is also following suit.

A battery manufacturer under the umbrella of LG Chem in South Korea, it was listed on the Korean stock exchange in January.

As a result, we will raise more than 1.2 trillion yen in Japanese yen, and most of it will be used for factory construction in the United States and other countries, and we will take the top spot.

A person familiar with the field of in-vehicle batteries points out that "Panasonic is different from overseas companies in terms of investment scale and speed."

Like the old plasma TV, which had to withdraw after making a huge investment, the deficit swelled, and if the timing is wrong, there is a risk that the management will deteriorate directly.

However, it seems that the backs of Chinese and Koreans are moving away while they continue to invest cautiously for fear of risk.

Panasonic's strategy is

The field of batteries, where competition is intensifying.

What kind of strategy is Panasonic, which once ran fast in the world's number one position, aiming for a comeback?

At the press conference mentioned at the beginning, CFO Umeda said, "There is a very strong request from Tesla" regarding the construction of a new production line in Wakayama.

Behind the decision, it was revealed that Tesla, which has the largest share of the world market in EV sales, was present.

A bitter experience "as Tesla says"

The partnership between the two companies began in 2006.

Sanyo Electric, which is now a subsidiary of Panasonic, has begun supplying batteries to Tesla's first EV, which was still a venture company at the time.

In 2010, invested in Tesla as Panasonic (shares have already been sold).

After that, we made a large-scale investment in "Gigafactory" in Nevada, USA, which is jointly operated with Tesla, which is said to exceed 200 billion yen by 2020.

However, there are many issues such as securing local engineers and establishing a stable production system.

It took about five years from the investment decision to the profitability of the business.

"In Nevada, Tesla has been saying it," said

one executive, who recalled it as a painful experience and still contributes to the hesitation of huge investments.

Wakayama Factory holds the key to the next huge investment

Under these circumstances, the factory in Wakayama Prefecture, where a new production line will be established, is expected to hold a big key for the next huge investment.

Tesla is currently building a new production base in Texas.

From around the fall of last year, there was widespread belief that Panasonic would make an investment of several hundred billion yen to supply batteries here.

I've been chasing this theme for the last few months.

Panasonic's decision now is to invest billions of dollars to secure factory land in Oklahoma in the south and Kansas in the Midwest, where Texas is easily accessible.

However, it seems that there are still many voices within the company who are hesitant about the huge investment of building a factory.

Panasonic executives

"Huge investment such as factory construction is due to verification at the Wakayama factory. There are many strict opinions on huge investment even at the board of directors."

For this reason, we will first aim to establish methods for reducing costs and mass production technology at the Wakayama factory, which will start production of the same batteries in advance.

The next step was to take a two-tiered strategy to decide whether to invest hundreds of billions of yen, taking advantage of subsidies from the local state government where the factory site is located. ..

Is your relationship with Tesla a strength?

Is it a risk?

On the other hand, what will happen to your relationship with Tesla in the future?

The depth of our relationship with Tesla is one of Panasonic's strengths, but it can also be a weakness.

CATL in China collaborates with Tesla at its Chinese factory.

LG Energy Solutions of South Korea is also focusing on mass production of the new battery "4680" and strengthening its approach to Tesla.

Some people familiar with the industry are worried, "If you don't invest in the United States, Tesla may say,'You don't have to be Panasonic anymore.'"

However, for Panasonic, how to raise investment funds in order to maintain a collaborative relationship with Tesla is a major issue.

That's because, last year, I bought an American software company for more than 770 billion yen, but the investment capacity is decreasing.

On the other hand, it is also an important issue to move away from "Tesla dependence".

Currently, almost all of Panasonic's in-vehicle cylindrical batteries are for Tesla.

In addition to launching a joint venture with Toyota to produce square batteries that are different from the cylindrical batteries that are supplied to Tesla, we are also considering selling the new battery "4680" to other automobile manufacturers. However, it is not yet clear how far the transactions with other than Tesla will expand.

Because it is one of the few fields that remains competitive

In April, we will shift to a holding company system, and the battery business will start as an independent operating company.

This organizational reform aims to increase the speed and competitiveness of each business.

The debate is about to begin in earnest as to what kind of vision the new company responsible for the battery business is trying to win the international competition.

The battery business is also one of the few areas where Japanese companies remain competitive.

I hope that Panasonic will continue to take on the challenge of growth in the future.

Tomokazu Kogi ,

Osaka Broadcasting Station

Joined in 2007. Covered

the financial industry at the Ministry of Economic Affairs, and is currently in charge of economics at the Osaka Station.