Medium- to Long-Term Strategy
(announced in FY3/23)

*This content is an excerpt from the presentation given at Panasonic Group IR Day 2022 in June 2022.
In this page, "Fiscal 2023" or "FY23" refers to the year ending March 31, 2023.
The information provided is as of June 2022 and subject to change.

* This content is an excerpt from the presentation given at Panasonic Group IR Day 2022 in June 2022.
In this page, "Fiscal 2023" or "FY23" refers to the year ending March 31, 2023.
The information provided is as of June 2022 and subject to change.

Our Business Scope and Values

For nearly 100 years, Panasonic has contributed to enriching people's lifestyles and making society more convenient through the introduction of various industry-first technologies as a leading battery manufacturer. Our strengths are technological capabilities in materials development, manufacturing, and intellectual property, and market creation capabilities in solving problems through strategic relationships with customers, as well as highly reliable market track record and our brand that we have cultivated over the years.

Going forward, we will focus on the "automotive" and "industrial and consumer" businesses, namely the "green" and "digital" fields, where we can make a significant contribution to solving environmental issues and leverage our strengths. In the automotive business, electric vehicles (EVs) are entering a period of full-fledged dissemination on a global scale aiming to reduce environmental impact, and the world's battery market size is expanding significantly. In the industrial and consumer business, new demands are being generated due to the accelerating electrification of social infrastructure, such as increased data volume due to the expansion of the digital society and the effective use of renewable energy.

In these focused fields, we will maximize our contribution to society by reducing CO2 emissions, establishing a safe and secure social infrastructure, and providing convenient and comfortable lifestyles through our cutting-edge technologies and diverse product lineup.

Battery History and Strengths of Our Company
Business Scope and Contributions

Medium- to Long-term Management Goals

To realize sustainable growth in the medium to long term, we will implement management based on the two pillars, which are "growth potential" in the automotive business and "profitability" in the industrial and consumer business. Furthermore, we will lead the way in building a sustainable social environment through our business activities.

In implementing management based on the two pillars, we have set EBITDA (1) as a KGI, which is a measure of profitability, and aim to achieve sales growth of 10% or more per year and EBITDA of 20% by fiscal 2027. As our medium-term financial goals for fiscal 2025, we have set goals of a 200 billion yen increase in sales and 30 billion yen increase in EBITDA to 150 billion yen (EDITDA of 16%) compared to fiscal 2022.

In terms of environmental contributions, we have set carbon footprint (2) as a KGI and will promote measures to reduce CO2 emissions from our business activities and the supply chain and address resource issues. Our goals for fiscal 2031 are to reduce our carbon footprint by half and to increase our contribution to CO2 emissions reduction through products in our business activities five-fold to 60 million tons from the fiscal 2022 level, and we are working to achieve these goals.

(Note 1) EBITDA: Operating income + depreciation and amortization
(Note 2) Carbon footprint: A figure that expresses the amount of greenhouse gas emissions in terms of CO2 throughout the entire life cycle, from raw material procurement to disposal and recycling 

Overall Concepts of the Medium- to Long-term Strategy
Medium-term Management Targets

Strategy for Automotive Business

We have supplied a cumulative total of over ten billion cylindrical lithium-ion battery cells to date, which is equivalent to 1.7 million EVs, since mass production of the 1865 and 2170 cells started in FY2009 and FY2018 respectively. While maintaining the top market share position in North America, we are highly aware of safety as a manufacturer and have never had a recall attributable to our batteries.

Looking back on our history of technological evolution advancing automotive cylindrical battery technology, we have always led the industry in developing their platforms and increasing their capacity. Our overwhelming technological capabilities and further improving the existing 2170 cells and the newly developed 4680 cells will enable us to contribute to the evolution and dissemination of EVs.

Our strategy for the automotive business is to focus on the North American market, where we can leverage our strength in higher capacity and where we already have a strong business foundation, toward sales expansion of the proven 2170 cells and commercialization of the new 4680 cells ahead of our competitors. To meet strong demand from customers, we aim to expand our production capacity of automotive batteries by approximately 3 to 4 times by fiscal 2029, mainly in North America.

Our Achievements (Automotive Business)
Business Strategy(Automotive Business)

Strategy for Industrial and Consumer Business

In the industrial and consumer business, we will expand our areas of contribution to society through promoting social transformation toward digitalization and electrification with our highly safe and reliable technologies and applied battery systems based on our core cell technologies.

There has been a growing need for 24-hour/365-day operation and data integrity at data centers and other information and telecommunications infrastructures, and we offer highly reliable, safe and long-life backup power supply systems and have a large market share. For power equipment, including battery-assisted bicycles and construction and agricultural machinery, whose power is expected to be electrified, we have been working with our customers to develop optimal battery packs and systems. We also offer highly reliable primary batteries for IoT equipment, such as smart meters and medical devices, which requires adaptability to operating environments and long-term reliability.

In terms of the supply system, we will produce optimized battery cells for infrastructure and power equipment at the Tokushima Factory and increase the assembly capacity of packs and modules at the Mexico Factory. For IoT equipment, we will build a new facility at our Wuxi Factory in China to increase production of primary lithium batteries, while establishing a new dry battery factory in Nishiki-no-hama, Osaka, to continue to fulfill our long-term responsibility for supply. In addition to the shift from the business of single cells to battery packs and modules, we will further expand applications to realize multilayer product portfolio to maximize our value.

This way we will move forward to develop another business pillar, the industrial and consumer business, through a different strategy than that of the automotive business.

Business Strategy (Industrial and Consumer Business) 
Enhancement Actions (Industrial and Consumer Businesses)

Contributions to the Environment

Regarding the carbon footprint of EV batteries, 14% of CO2 is emitted in our manufacturing process and the other 86% is emitted at the upstream stages. This shows that CO2 emissions are particularly large during resource mining and raw material processing, and we believe that it is essential to utilize recycled materials and reduce the use of rare metals. In addition to becoming carbon neutral ourselves, we aim to halve our carbon footprint by fiscal 2031 by promoting practical measures at the upstream stages.

As part of the initiatives, we have already achieved carbon neutrality at five of our 20 factories as of fiscal 2022, and we aim to achieve this goal at all of our dry cell factories by fiscal 2025, at all of our domestic factories by fiscal 2026, and at all of our factories worldwide by fiscal 2029. Our initiatives also include the  development of methods to reduce the use of rare metals. Since rare metals are contained in tiny amounts in minerals and CO2 is inevitably emitted when they are refined, reducing their use directly leads to the reduction of CO2 emissions. We have already completed the development of cobalt-free technology and are currently approaching cathode materials with a greatly reduced nickel ratio.

We will actively promote collaboration with external partners in process development and recycling to consider the most effective measures to establish a low carbon footprint supply chain of batteries.

Contributions to the Environment
Efforts for Environmental Contributions