Panasonic is set to reduce its reliance on companies such as Tesla by developing electric vehicle batteries that are more compatible with models produced by other automakers, according to the company's CEO.
Panasonic batteries
This comes as Tesla has begun expanding its battery production towards domestic manufacturing by investing in plants like the one the company is planning in Texas, leaving a void in the market Panasonic's CEO wishes to fill.
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Kazuhiro Tsuga, who is set to stand down as chief to take his place as company chairman in April, told the FT his company should look to expand their horizons as the digital transformation and energy transition mark future trends for the industry.
He said: “We are entering a different phase and we need to keep an eye on supplying manufacturers other than Tesla.”
Panasonic has been a supplier for the US-based tech company since at least 2010, back when electric vehicle technology was significantly less advanced than it is today.
Its battery business has continued to be profitable, even in the face of the coronavirus pandemic, its annual earnings report has shown.
Electronics companies have performed well during the crisis, owing to increased consumer demand for their products as more people are either working from home or furloughed.
Under Tsuga, Panasonic has shifted primarily towards supplying the automotive industry after choosing to drop its less profitable ventures such as plasma display panels, investing in Tesla's Nevada gigafactory in 2014. As on lastest reports, the electronics company has invested a total of $2 billion (€1.68 billion) in the project.
The company suffered $15 billion (€12.6 billion) in losses in the two years prior to March 2013, when Tsuga took over and transformed the company's business model to be profitable again.
He has spent the vast majority of his tenure cutting losses and shifting its business.
However, as the semiconductor shortages put pressure on a number of industries and western buyers look to expand domestic production in a bid to move away from relying on predominantly Asian suppliers, the Panasonic chief has stipulated the company must expand its production to cover a more general audience.
A number of automakers are shifting focus towards electric vehicles in the face of stricter climate targets - and sometimes outright bans on traditional engines - in order to minimise the effects of climate change.
This has opened an entirely new market as the industry looks to push electric vehicle technologies to the forefront of market innovations over the next decade.
In the same interview, Tsuga added: “We need to make batteries that are easy to use for other carmakers. Currently, it is difficult to sell unless there is a company that is able to handle our cylindrical batteries with Tesla specifications.
"When I tried to shift to high-growth areas such as automotive, I realised that the various other businesses were not able to build a growth strategy and losses kept popping up everywhere."
Read more: Panasonic, Norsk Hydro, Equinor consider "green battery" plant in Norway
European carmakers such as Volkswagen already have supply agreements with Panasonic but its Tesla supply is bespoke and requires a higher degree of skill and craftsmanship to produce.
Tsuga also told the FT of his plans to shift Panasonic to a holding company structure under its incoming CEO Yuki Kasumi. He hopes this will instill more business discipline and enable the company to better meet its financial targets.
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