Pursuit of Quality and Product Safety

Activities to ensure product quality and safety

The batteries we sell are devices that store high-density energy in large capacities, and their safe and reliable use is an absolute necessity. In particular, Li-ion batteries, our main products, have inherent risks that can lead to smoke and fire; these risks include high energy density, which can cause the battery to reach high temperatures in the event of a short circuit, and the use of flammable liquid as an electrolyte. Given these product characteristics, we issued a recall notice to prevent unsafe accidents, which caused great concern and inconvenience to our customers and other concerned parties.

Based on these reflections and lessons learned, we continue to promote quality innovation, including making quality assurance processes more robust, enhancing safety design and manufacturing, and fostering a quality-oriented culture, to ensure high quality standards with the utmost priority on product safety, and we had no serious product incidents in fiscal 2026. We will continue to work toward the goal of zero incidents going forward.

To establish a quality assurance process, we have built and operate a quality management system that complies with ISO 9001, IATF 16949, and other global standards in each business division, and regularly check its effectiveness through internal and external audits. We also conduct our own quality audits of business divisions through our Quality & Environment Center to identify weaknesses and issues in terms of quality assurance and compliance, and work with business divisions to make improvements toward better quality assurance through the horizontal application of best practices. In fiscal 2026, we established a new Quality Audit Department within the Center to systematically strengthen these activities. In particular, in fiscal 2026, the Quality Audit Department conducted a special quality compliance audit, described below, and worked to prevent recurrence of quality issues.

The environment, fields, and devices in which batteries are used are changing with the evolution of society. To address these changes in the design process, we identify and verify risks together with our customers (B-to-B and B-to-C) and suppliers of parts and materials. The identified risks are then fed back to product design, component design, and process design to confirm their validity as key verification items in the development process. To prevent problems in the manufacturing process as well, we identify risks and take countermeasures by visualizing key data (DX) and FMEA*² in all processes from source to shipping, thereby bolstering management. We are also committed to developing human resources capable of putting these initiatives into practice by providing training in quality tools and statistical management methods, as well as support for hands-on activities.

*2 Failure Mode and Effects Analysis

We regularly hold various training sessions and events for all employees to foster a culture of placing the highest priority on product quality and compliance. Especially during "Quality Month," which is held every November, we work to raise awareness and foster a quality-oriented culture through messages from executives, discussions of quality themes at workplace meetings, and passing on the details of and lessons learned from past product incidents.

Furthermore, in order to develop human resources who can achieve the quality we aim for, we are building and implementing an education system according to rank and skill and hosting various events, among other activities. For technical employees, we provide training in various quality management methods aimed at proactive application to actual work as well as the fundamentals of quality. For young quality personnel, we have established training courses that enable intensive learning and are working to enhance their development.

In fiscal 2026, we carried out the following initiatives.

When management executives announce policies at the beginning of the fiscal year and results at the end of the fiscal year, they share quality-related policies and results with employees, leading to the encouragement of Company-wide quality improvement. During “Quality Month” in November, the CEO, CTO/CQO, Director of the Quality and Environment Center, and Directors of each business division delivered messages on the importance of quality, in order to reaffirm that quality is an absolute requirement for our business.

We also held a Company-wide technology symposium, with a corner devoted to displaying posters from the quality control departments, where we promoted communication across departmental boundaries and deepened mutual understanding for improving quality through reports on activities to improve design and manufacturing quality and examples of tool utilization. Management executives also participated in the symposium, exchanging opinions directly with employees from the quality control departments in front of the presentation posters on topics such as "how to improve quality."

We consider product safety to be one of our most important social responsibilities. With the aim of improving the product safety awareness of each and every employee, Panasonic Energy has held product safety forums regularly since its founding in 2022. A total of eight forums have been held as of the end of fiscal 2026. In fiscal 2026, in-house experts gave lectures on the topics "Safety Analysis of Lithium Ion Battery Packs" and "Case Studies of Past Lithium Ion Battery Problems in the Market." These lectures allowed us to review past quality issues and deepen our understanding of the safety technologies and safety designs that we have developed. Attendees commented that the lectures gave them a deeper understanding of the importance of product safety and reaffirmed the need for cross-departmental collaboration across manufacturing-related job functions—development, design, production engineering, quality, manufacturing, and procurement—to thoroughly implement quality control throughout the entire product lifecycle. Going forward, we will continue to use this forum to raise company-wide awareness of product safety, and strive to earn the trust of society by continuously providing safe and reliable products.