Panasonic puts high priority on China despite supply chain risks

TOKYO (Reuters) – China remains a high-priority market for Panasonic even as geopolitics have highlighted the need for robust supply chains elsewhere, the Japanese group’s chief executive said.

Leaders at the recent Group of Seven (G7) summit in Hiroshima stressed the need for firms to “de-risk” but not “decouple” from the world’s second-largest economy.

“We will continue to develop our businesses in China as we have done in the past,” Yuki Kusumi said during a roundtable interview with reporters in Tokyo on Wednesday, adding that there was “no doubt” that it was a high-priority market.

China made up about 11.5% of Panasonic’s sales in the business year to end-March at 964.7 billion yen ($7.14 billion).

Kusumi said Japanese automakers were showing interest in Panasonic’s cylindrical batteries, adding there may be cases where the Osaka-based company could handle operations for them.

The CEO did not provide names of domestic car makers from which Panasonic had received inquiries about its cylindrical batteries, which are used in electric vehicles.

Panasonic, whose energy unit makes batteries for Tesla, said last week it plans to build at least two new plants for its 4680 battery production in North America by 2030.

With that move, it seeks to boost its auto battery capacity to 200 gigawatt hours per year by March 2031, about four times its level at the end of March.

Panasonic was “of course” conducting research and development into 4680 battery cells that use a dry electrode manufacturing process, Kusumi said, without elaborating.

($1 = 135.0500 yen)

(Reporting by Miho Uranaka and Daniel Leussink; Editing by David Dolan, Jason Neely and Alexander Smith)