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 the company believes are essential 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 2024, according to a statement. released on Friday.
Panasonic is also targeting a cumulative operating profit of 1.5 trillion yen during this period.
Panasonic, a 104-year-old Japanese company that drove global consumer electronics sales, is looking for new ways to grow.
Former CEO Kazuhiro Tsuga spent nearly nine years ditching struggling businesses such as plasma TVs before handing over to Yuki Kusumi a year ago.
Kusumi, the head of a weaker nonprofit, now faces the challenge of leading Panasonic on a steady growth path.
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 it comes to defining areas for growth, Panasonic “thought about what the business will look like in 2030 and looked at it from there,” Kusumi said during a briefing.
Panasonic seeks to diversify your business
One such growth area is the Panasonic business, which supplies batteries for electric vehicles. The automaker is in talks about a US plant where it plans to build next-generation 4680 batteries for Tesla and possibly other automakers. 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 makes supply chain management tools and uses artificial intelligence to predict product demand. The idea is to bundle 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 planned to spend two years “specialising and refining” Panasonic’s remaining businesses. Increased efficiency during this period will increase the company’s ability to generate cash, freeing up 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 over the past year it had acquired “a good sense” of what the company is doing. must do to further develop its operations.