Panasonic to spend $5bn on EV cells, supply chain software

Panasonic Holdings plans to invest JPY600bn ($4.9bn) in fields including automotive batteries and supply chain software that the company sees as core to its growth.

The Osaka-based firm will invest JPY400bn in growth areas including electric vehicle cells, and another JPY200bn in technology pillars such as hydrogen energy over three years through fiscal 2024, according to a statement Friday. Panasonic is also targeting an accumulated operating profit of JPY1.5tn in the same period.

Panasonic, a sprawling 104-year-old Japanese electronics company that used to top global consumer electronics sales, is seeking new avenues for growth. The company’s previous chief executive officer Kazuhiro Tsuga spent close to nine years shedding struggling businesses, such as plasma TVs, before handing the reins to Yuki Kusumi in April last year.

Kusumi, head of a leaner company that’s no longer bleeding red ink, is now faced with the challenge of steering Panasonic onto a path of sustained growth. He’s spent the past year shaping Panasonic into a holding company, a structure within which, the CEO maintains, it will be easier to decide where to invest for long-term growth.

Kusumi said in an interview in June that he plans to spend two years specialising and sharpening Panasonic’s remaining businesses. Upping efficiency over that period will increase the company’s ability to generate cash, in turn freeing up hundreds of billions of yen to direct toward new initiatives including mergers and acquisitions, he said.

One of those areas of growth is Panasonic’s business supplying batteries for electric vehicles. There, it’s in talks over a site for a factory in the U.S. where it plans to build next-generation 4680 batteries for Tesla Inc. and potentially other automakers. The multibillion-dollar plant could begin operating as soon as 2024, Bloomberg News reported.

Panasonic also sees opportunities in supply chain software. Last year, it spent $7.1 billion acquiring artificial intelligence software developer Blue Yonder, one of the Japanese firm’s biggest-ever acquisitions.

Arizona-based Blue Yonder makes supply-chain management software and uses artificial intelligence to predict product demand. The idea is to wrap Blue Yonder software together with Panasonic hardware, like cameras and senors, to offer higher margin solutions to customers.