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Panasonic to Invest $5B in EV Batteries & Software!
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Panasonic plans to invest 600 billion yen ($4.9 billion) in vehicle batteries, supply chain software, and other areas that the business sees as critical to its future success.
According to a statement released Friday, the Osaka-based manufacturer would invest 400 billion yen in growth categories such as electric vehicle cells and another 200 billion yen in technology such as hydrogen devices during the next 3 years, up to fiscal 2024. Panasonic also wants to make a cumulative operating profit of 1.5 trillion yen over the next few years.
Panasonic, a 104-year-old Japanese conglomerate that once dominated worldwide consumer electronics sales, is looking for new ways to expand. Kazuhiro Tsuga, the company’s previous CEO, spent nearly nine years shedding underperforming companies corresponding to plasma TVs before turning over the reins to Yuki Kusumi a year ago.
Kusumi, as the leader of a leaner firm that is no longer bleeding red money, now has the task of directing Panasonic onto a path of long-term success. He spent the previous year transforming it into a holding company, which the CEO claims will make deciding where to invest for long-term growth easier.
Panasonic “examined what society will look like in 2030 and back-cast from there” when defining development sectors, Kusumi said in a news briefing.
Panasonic’s business of selling batteries for electric vehicles is one of these areas of expansion. The company is looking for a location in the United States where it can construct next-generation 4680 batteries for Tesla Inc. and possibly other manufacturers. The multibillion-dollar facility might start running as early as 2024.
Panasonic sees potential in supply-chain software as well. It paid $7.1 billion for Blue Yonder last year, making it one of the Japanese company’s largest-ever acquisitions. Blue Yonder, situated in Arizona, creates supply-chain management software and employs artificial intelligence to forecast product demand. The objective is to combine Blue Yonder’s technologies with Panasonic hardware, including cameras and sensors, to provide customers with higher-margin goods.
In a June interview, Kusumi stated that he intends to devote the next two years to “specializing and polishing” the remaining companies for Panasonic. Increasing efficiency throughout that time period will boost the firm’s ability to earn cash, allowing it to invest hundreds of billions of yen in new projects including mergers and acquisitions, he said.
Panasonic’s new operational profit objective appears aggressive when compared to previous results, Kusumi added. But he did say, though, that the company is focused on continuously improving in order to achieve its goals, and that he’s gained a strong idea of what the company needs to do to further expand its operations during the past year.