Panasonic Cuts Its Losses To Focus On EV Batteries With Subaru
Panasonic Holdings announced its decision to liquidate Panasonic Liquid Crystal Display, its subsidiary specialising in LCD panels. This move comes as part of the company’s strategic shift towards manufacturing electric vehicle (EV) batteries, partnering with Subaru.
Source: Nikkei
By redirecting its Himeji-based factory into an EV battery production base, Panasonic aims to enhance its position in this rapidly growing sector. The decision to dissolve the subsidiary comes with significant financial implications. Panasonic will waive a substantial ¥580 billion ($4.11 billion) debt owed by the display unit to another subsidiary.
The subsidiary primarily focused on producing LCDs for automotive and industrial applications. However, increased price competition from South Korea (Samsung and LG), Taiwan, and mainland China led to a decline in profitability.
In response, Panasonic decided in 2019 to scale down its LCD business to focus solely on inventory sales. The liquidation of the LCD business will result in the loss of approximately 500 jobs in Himeji.
Partnership With Subaru
Japanese automaker Subaru instead plans to join forces with Panasonic Energy to build automotive cylindrical Li-ion batteries for its new EVs. Subaru appears confident the partnership will enable them meet the meet the demand for battery electric vehicles (BEVs) and automotive batteries in a rapidly expanding market.
Subaru disclosed they will hold discussions regarding Panasonic Energy supplying them with next-generation automotive cylindrical lithium-ion batteries.
The announcement was quoted as saying, “Subaru will install batteries purchased from Panasonic Energy in BEVs to be produced from the latter half of the 2020s at its sites, including a dedicated BEV plant scheduled to be constructed in Gunma, Japan.”
It added that Subaru and Panasonic Energy will contribute to developing the automotive and battery industries and help solve social issues, such as maintaining employment in the region and developing human resources.”
Subaru reportedly announced accelerating its electrification and other initiatives by “setting a roadmap toward 2050 to contribute to the realization of a carbon-neutral society.” Subaru’s electrification plan and will offer three new electric vehicles by 2026.
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