People are reflected on a sign at Panasonic Corp's showroom in Tokyo July 29, 2010.Toru Hanai/Reuters
Panasonic Corp. is in talks with about 20 car makers about using its lithium battery cells in electric vehicles, but is cautious about expanding production as it battles with low-cost Asian competitors, an executive said.
The company, which vies with Sony Corp for the title of the world's biggest consumer electronics maker, is also making progress on plans to open a white goods production site in the Indian state of Haryana, a second executive said.
Fresh from announcing its buyout of the world's top rechargeable battery maker, Sanyo Electric,, Panasonic is touting its own battery modules for the nascent electric vehicle market.
Packaged from standard-sized cylindrical lithium cells known as "18650" after their 18 mm by 650 mm dimensions, the company says they offer a cheap and flexible option for electric cars and the home energy storage markets.
Panasonic's cells already power niche U.S. car maker Tesla Motors' roadster sports model.
Their adoption in a mass-production vehicle would trigger an explosion in demand, Naoto Noguchi, head of the company's batteries division, told Reuters in one of a series of media interviews in Osaka this week.
"We're busy," he said, adding that the company was talking to about 20 car firms, both Japanese and foreign, with a view to supplying cells. "A lot of makers are showing interest, which is gratifying," he said.
Part of the attraction is the cost, which Noguchi says works out at less than half that of conventional lithium batteries.
Panasonic's cells feature nickel-based positive electrodes, which makes for a lighter, more durable battery compared with other options, but also requires safety features to eliminate the risk of explosion.
The car battery modules will not be ready for the mass market for about four years and no date has been fixed for a delayed expansion at a fourth lithium cell factory in the western city of Osaka, which would increase its capacity to 600 million units a year, Noguchi said.
The global lithium battery market actually shrank slightly in revenue terms in the financial year that ended in March, due to the weak global economy and fierce price competition from the likes of Samsung SDI and BYD Co of China.
But research firm Japan Economic Centre expects demand to more than double in worth to 1.5 trillion yen by 2015, thanks to the expected take-up of environmentally friendly plug-in cars.
"If electric vehicles take off we are talking about huge numbers," Noguchi said, noting about 2,000 cells would be needed for a compact electric vehicle.
CONSUMER GOODS
Separately, Panasonic is pushing ahead with plans for consumer goods production in an industrial park in India's Haryana state, Hitoshi Otsuki, managing director in charge of overseas markets said in an interview.
No contract has been signed, but Panasonic hopes to secure efficiencies by basing all new Indian production, including a planned air-conditioner factory in one area, as it aims for developing market sales of 770 billion yen by 2013.
Sales of consumer goods in the target developing markets grew by 30 per cent in the April-June quarter, exceeding expectations, the company said.
In Europe, Panasonic's Chinese-based factories are having trouble keeping up with booming demand for low-energy consumption refrigerators and washing machines, Otsuki said, adding that the company was still considering how to localize production.
"At this point in particular, environmental rules are becoming stricter, and that is an opportunity for us," Otsuki said, but noted that the region's economic woes were also a factor in the decision.