Panasonic to invest $5 billion in electric vehicle batteries and software

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Panasonic, a sprawling 104-year-old Japanese company that used to lead the world in consumer electronics sales, is looking for new avenues of growth.

The company’s former CEO, Kazuhiro Tsuga, spent nearly nine years shedding struggling businesses, such as plasma TVs, before handing over the reins to Yuki Kusumi a year ago.

Kusumi, running a lean business that is reporting no losses, now faces the challenge of steering Panasonic onto a path of sustained growth.

He has spent the last year building it into a holding company, which the CEO says will make it easier to invest for long-term growth.

When looking to define areas for growth, Panasonic “thought about what society will look like in 2030 and from there,” Kusumi said in a briefing.

One such growth area is Panasonic’s business of providing batteries for electric vehicles. The automaker is in talks on a site for a plant in the United States where it plans to build next-generation 4680 batteries for Tesla and potentially other automakers. The multi-billion dollar plant could start operating as early as 2024.

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

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

Kusumi said in a June interview that he planned to spend two years “specialising and refining” Panasonic’s remaining businesses. Increasing efficiency during this period will increase the company’s ability to generate cash, freeing up hundreds of billions of yen to direct to new initiatives including mergers and acquisitions, he said. declared.

Compared to prior results, Panasonic’s new operating profit target “looks ambitious,” Kusumi said. However, the company is working on “continuous improvement in order to achieve its goals”, he said, adding that over the past year he had had a “good idea” of what the company is doing. company had to do to further develop its operations.

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