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Panasonic Holdings Corporation: From Osaka Tenement to Global Powerhouse
I. Introduction & Episode Roadmap
Picture this: A cramped two-room tenement in eastern Osaka, 1917. Inside, a 23-year-old with chronic bronchitis, no formal education beyond elementary school, and pockets so empty he'll soon have to pawn his wife's kimono—is about to change the world. His name is Konosuke Matsushita, and alongside his wife Mumeno and brother-in-law Toshio Iue (who would later go on to found Sanyo Electric), he's tinkering with a rejected light socket design that his boss at the utility company dismissed as unimpressive.
How did that rejected light socket become a $70+ billion revenue conglomerate that now powers Tesla's electric revolution? That's the question at the heart of this deep-dive into Panasonic Holdings Corporation.
Konosuke Matsushita founded Panasonic, the largest Japanese consumer electronics company, and is referred to as the "God of Management" in Japan. But the story of Panasonic is far more than one visionary founder—it's a century-long odyssey through world wars, consumer electronics dominance, catastrophic plasma TV losses, and now a bet-the-company pivot into electric vehicle batteries that could define whether this 107-year-old company survives another century.
Founded in 1918, and today a global leader in developing innovative technologies and solutions for wide-ranging applications in the consumer electronics, housing, automotive, industry, communications, and energy sectors worldwide, the Panasonic Group switched to an operating company system on April 1, 2022 with Panasonic Holdings Corporation serving as a holding company and eight companies positioned under its umbrella.
The themes we'll explore: A philosophy-driven management model that predated modern corporate governance by decades. The painful pivot from consumer electronics dominance to B2B solutions. The transformative Tesla partnership. And the 2022 holding company reinvention that represents either Panasonic's salvation or its final roll of the dice.
What makes this story particularly fascinating is the sheer scope of what Panasonic produces. Beyond the consumer electronics for which it was once the world's largest manufacturer, the Group reported consolidated net sales of 8,496.4 billion yen for the year ended March 31, 2024. Today's Panasonic makes everything from rechargeable batteries and automotive systems to home renovation products and avionic equipment—a sprawling empire that either represents diversified strength or strategic confusion, depending on whom you ask.
II. The Founder's Journey & Company Origins (1894-1935)
The Unlikely Entrepreneur
Konosuke Matsushita was born on November 27, 1894 in Wasamura, now part of Wakayama Prefecture. His father was an affluent landlord in the farming village of Wasa and was one of the wealthiest men of his community.
But wealthy is a relative term, and fortune in 19th century rural Japan was precarious. Matsushita came from a large family—he was one of eight children born to an affluent landowning family in an agricultural region of modern Wakayama. When Konosuke was four years old, his father made a series of unsuccessful speculations on the rice markets and went bankrupt. As a result, he lost all his land and the family home itself. The family was torn apart and the children had to scramble to make a living however they could.
This reversal of fortune would shape everything that followed. Konosuke left home at the age of nine to look for work in the Senba area of Osaka, a famous commercial center. In this new environment, he quickly learned about trade and commerce, how to do business, and about human life and the emotions. But this early experience alone, tough as it was, would not have been enough to transform him into a philosopher. When he was still an adolescent, he lost both his parents and all his siblings apart from one older sister in the space of a decade, as one family member after another died of tuberculosis.
This crucible of loss—poverty, parental death, the decimation of his entire family—forged something unusual in the young Matsushita. The conclusion he eventually reached was that all human life is precious. "Human beings are the monarchs of all living things," to use his expression. This wasn't arrogance but responsibility: the conviction that human beings have an obligation commensurate with their capabilities.
Shortly after Matsushita left school, he was sent away to Osaka to become an apprentice for a Japanese barbecue restaurant. However, the business failed within a year, and Matsushita was left looking for other employment. He then applied for a job with the Osaka Electric Light Company, an electrical utility company, where he received several promotions over the next few years.
The streetcars of Osaka captivated young Konosuke. Watching electricity power these mechanical marvels through the city streets, he concluded that his future lay in the electrical business. The decision to leave the bicycle shop where he had been working for a position at Osaka Electric Light was a classic Matsushita risk—abandoning the certain for the possible.
The Founding Moment
At the age of 22, he was promoted to the position of electrical inspector. It was during this time that Matsushita attempted to introduce his boss to the invention of a new and improved light socket that he had perfected in his spare time. His boss, however, was not enthusiastic. In 1917, Matsushita left Osaka Electric Light Company to establish his own company.
Lacking capital, formal education, and experience in manufacturing, his company faced significant challenges. He set up his shop in the basement of his tenement where with his wife, his brother-in-law, and several assistants, he began producing product samples. However, he attempted to sell the samples to wholesalers but was unsuccessful because he did not offer more than one product. As a result, most of Matsushita's assistants left the company, leaving only his wife and Iue, who played a key role as a salesman and manager.
The company faced financial difficulties and was on the verge of bankruptcy until it received an unexpected order for a thousand insulator plates for electric fans. From there, Matsushita was able to continue producing his light sockets. They became popular as wholesalers realized the product was better in quality and less expensive than comparable products in the market. The early years of the company were difficult: he once had to pawn his wife's kimono when he found himself short on money.
Consider this image: a man with chronic lung problems, no formal schooling, operating out of a tenement basement with his wife and brother-in-law, so strapped for cash that his wife's ceremonial dress goes to the pawnbroker—and yet, somehow, this man would build an empire that at its peak would exceed $60 billion in annual revenue.
Early Product Innovation
One of Matsushita's best products was the development of a more efficient battery-powered bicycle lamp. During the 1920s, bicycle lamps were candles or oil-burning lamps which were highly inefficient as they usually only lasted for three hours.
Matsushita's lamp lasted thirty to fifty hours—a ten-fold improvement. More importantly, it embodied what would become his core philosophy: make quality goods so plentiful and inexpensive that everyone could afford them.
Matsushita's products were originally marketed under the name brand of "National" and later moved on to the more recognizable names of Panasonic, Quasar and Technics. In 1927, Matsushita adopted the "National" brand name for a new lamp product. In 1918, at the age of 23, he formally established Matsushita Electric Housewares Manufacturing Works, which was reorganized in 1935 as Matsushita Electric Industrial Co., Ltd.—the corporate entity that would eventually transform into today's Panasonic.
The investor takeaway from this founding story isn't just inspirational origin myth—it reveals the DNA of the company. Matsushita's obsession with quality at low cost, his willingness to bet everything on conviction, and his philosophical approach to business all continue to echo through the company more than a century later. Whether that cultural DNA remains an asset or a liability in the age of CATL and BYD is the question that defines Panasonic's current investment thesis.
III. The Philosophy-Driven Company: Building the "Matsushita Way" (1930s-1970s)
The Unique Management Philosophy
Konosuke Matsushita wasn't just building products—he was building a philosophy. His most famous articulation became known as the "tap water" philosophy: "Create material abundance by providing goods as plentifully and inexpensively as tap water. This is how we can banish poverty, bring happiness to people's lives, and make this world a better place."
This wasn't marketing speak. He believed that a company should create wealth for society as well as for shareholders, and should always work to alleviate poverty. Matsushita's business philosophy led to the Japanese "paternal management" tradition, whereby employees are viewed as being part of a "family" within the company, and are assured of lifetime employment, without fear of layoffs.
Outside the office of the Matsushita company, engraved in stone, is the creed and basic management objective of its creator and long-time president. The plaque says, "Recognizing our responsibilities as industrialists, we will devote ourselves to the progress and development of society and the well-being of people through our business activities, thereby enhancing the quality of life throughout the world." One of the most lasting of Matsushita's business sayings was, "If we cannot make a profit, that means we are committing a sort of crime against society."
This fusion of profitability and social responsibility predated modern ESG frameworks by decades. Matsushita saw no contradiction between making money and doing good—in his view, profit was evidence that a company was efficiently serving society's needs.
Matsushita was president of the company until 1961, at which time he became chairman of the board of directors. His influential business philosophy, which called for the production of essential consumer goods in abundance at the lowest possible prices, was widely adopted in the egalitarian, consumer-oriented society that emerged in Japan in the second half of the 20th century.
Perhaps most remarkable was Matsushita's development of a divisional system that predated similar Western management innovations. By organizing the company into semi-autonomous divisions responsible for their own profits and losses, Matsushita created internal accountability mechanisms that allowed rapid scaling while maintaining entrepreneurial focus.
Post-War Reconstruction & Global Expansion
World War II ended in 1945 with Japan devastated both physically and spiritually. Konosuke demonstrated his resolve for peace and national recovery to employees and the general public who were feeling weary and dejected after the war. His message was direct: "Production is the very foundation of our recovery."
In November 1946, with the desire to achieve peace and happiness through prosperity, Konosuke Matsushita founded PHP Institute. At that time, Japanese society was in deep poverty and chaos brought about by the defeat of World War II, and he, who witnessed people's miserable life, often thought, "Is this the original face of human beings?" After much deliberation, he concluded: "Through both material and spiritual prosperity, humankind should be able to achieve a peaceful and happy life."
The expansion went global. In 1959, Konosuke founded MECA in New York as the first post-war overseas sales company. He urged his managers to adapt to their new host nation and to apply themselves to providing products that Americans would appreciate. During this period, he also built factories abroad, including National Thai as the first overseas manufacturing company in 1961 and Matsushita Electric (Taiwan) in 1962.
Since 1954, Matsushita also gained a significant shareholding in manufacturer JVC by forming an alliance. This alliance would prove crucial in the coming VHS-versus-Betamax wars, where JVC's VHS format—backed by Matsushita's manufacturing and distribution muscle—would triumph over Sony's technically superior but commercially defeated Betamax.
In 1955, the company began branding audio speakers and lamps as "PanaSonic" for markets outside of Japan—a name that would eventually consume the parent brand entirely.
The China Connection
Founder Konosuke Matsushita foretold that "The 21st century will be the era of Asia including Japan and China." On October 28, 1978, the history of Panasonic's development in China began with a visit by Chinese Vice Premier Deng Xiaoping to the TV Division.
Accepting an invitation from Deng Xiaoping, the founder visited China in 1979 and 1980 where they talked about establishing a joint venture as "Japan-China Electronic Industries Federation" for the purpose of facilitating the modernization of the electronics industry in China. But this was not approved by the Electronic Industries Association of Japan, so the founder decided: "If that's the case, Matsushita Electric will single-handedly undertake this joint venture project."
This early China bet positioned Panasonic ahead of most Japanese competitors in what would become the world's largest consumer electronics market—though whether that first-mover advantage has translated into sustainable returns remains debatable given China's subsequent development of domestic champions.
The Founder's Legacy
Konosuke Matsushita remained active in Panasonic's operations until his complete retirement in 1973.
In retirement, Matsushita focused on developing and explaining his social and commercial philosophies and wrote 44 published books. One of his books, entitled "Developing A Road To Peace And Happiness Through Prosperity", sold over four million copies. In 1979, at the age of 84, he founded the Matsushita Institute of Government and Management to train the future politicians and businessmen of Japan.
Having become far more than a business leader, Konosuke's thoughts had turned to the future of Japan and the world. He felt that it was vital to cultivate the leaders of tomorrow, and in 1979, this growing sense of mission led him to invest seven billion yen of his own funds to establish The Matsushita Institute of Government and Management.
In 1964, an American weekly magazine "LIFE" introduced him as a person who had five faces: top industrialist, biggest money maker, philosopher, magazine publisher, and best-selling author. Even today, he is often praised as "The God of Management" in Japan, and remains one of the most influential and inspirational leaders ever.
Chronic lung problems led to his death from pneumonia on April 27, 1989, at the age of 94. He died with personal assets worth US$3 billion, and left a company with US$42 billion in revenue business.
For investors, the founder's legacy cuts both ways. The philosophical foundation—the "Matsushita Way"—created a cohesive corporate culture that enabled decades of growth. But it also created institutional rigidity that would later make Panasonic slow to adapt when the competitive landscape shifted.
IV. Consumer Electronics Empire: Peak and Decline (1980s-2012)
The Golden Era
By the 1980s, Matsushita Electric had achieved something remarkable: global dominance in consumer electronics. The company's products were everywhere—TVs, VCRs (having backed the winning VHS format via JVC), audio equipment, home appliances. The "National" and "Panasonic" brands became synonymous with quality and reliability across Asia, Europe, and America.
The product portfolio expanded continuously. In 1985, the company founded its Semiconductor Fundamental Research Laboratory to advance chip development. Battery operations were consolidated in 1979 through the establishment of Matsushita Battery Industrial Co., Ltd., enhancing production capabilities for rechargeable and dry cell technologies—a decision that would prove prescient decades later when those battery capabilities became the company's lifeline.
The Plasma TV Bet Gone Wrong
Then came plasma. And with plasma came hubris.
At their height, the company's many TV factories could churn out over a million plasma screens per month. Panasonic's TV division has been a major contributor to the electronics company's combined $15 billion net loss in its two latest financial years. Its TV business posted an operating loss of 88.5 billion yen ($913 million) in the last financial year. But Tsuga has waited until after Fumio Ohtsubo—the man who pushed Panasonic head-first into plasma with the 485 billion yen ($5 billion) Amagasaki project—resigned as chairman in June to make the decision to pull the plug on plasma completely.
The numbers tell the story of catastrophic miscalculation. Panasonic has suffered losses exceeding 750 billion yen through fiscal 2012 thanks to the waning product line. Former president Fumio Ohtsubo had banked on volume production keeping prices competitive, but the market oversaturated, the global economy tanked, and the business buckled.
Plasma was a technology in which TV makers once invested heavily but has been eclipsed by LCD business. Plasma display TVs accounted for less than 6 percent of global shipments in 2012, compared with 87 percent for LCD TVs. Japan's TV makers have been crippled by a strong yen and lost their innovative edge against Samsung with deep resources to spend on research and development.
The Crisis Years (2011-2013)
The crisis deepened. In April 2011, it was announced that Panasonic would cut its workforce by 40,000 by the end of fiscal 2012 in a bid to streamline overlapping operations. The curtailment represented about 10 percent of its group workforce.
Japanese consumer electronics giant Panasonic Corp. on Friday reported a near-record net loss of 754 billion yen ($7.5 billion) for the fiscal year through March due to restructuring costs and slumping sales, but predicted a return to the black this year as it prunes unprofitable businesses. The Osaka-based company, which makes Viera TVs and Lumix digital cameras, has been battered by plunging prices, the strong yen, an ailing TV business and intense competition from the likes of South Korea's Samsung Electronics Co.
Panasonic still has a factory in western Japan making LCDs, but has said it will shift production from 80 percent for TVs to 80 percent for mobile gadgets. But after dominating the business for decades, companies like Sony Corp, Sharp Corp and Panasonic have taken less than a decade to slide into deep losses, becoming also-rans to a new breed of nimble, cash-rich rivals like Samsung Electronics. Osaka-based Panasonic will pull out of the plasma TV business by the end of the financial year to March 2014. The end has come sooner than expected, underlining company president Kazuhiro Tsuga's determination to weed out weak operations as he focuses on higher-margin products to end years of losses at the consumer electronics conglomerate.
Japanese TV makers, while overlooking the ability of their rivals to build up a global brand quickly, did too little to protect their technology from rivals, were too easily convinced to spend big on projects and too slow to make strategic decisions to adjust to changing trends in demand. But those decades of dominance ended abruptly as the Japanese giants stumbled in the shift to flat-screen TVs, taking billions of dollars in write-offs for failed efforts to keep pace with nimbler rivals elsewhere in Asia.
Panasonic's plasma capitulation had greater implications beyond one company's balance sheet. It signposted the end of a brilliant era in TV technology, one dominated by the once mighty but now humbled Japanese consumer electronics industry.
For investors, the plasma debacle offers a crucial lesson: technological leadership and manufacturing scale are necessary but not sufficient conditions for sustainable competitive advantage. Samsung out-innovated, out-spent, and out-maneuvered the Japanese incumbents, demonstrating that deep resources and willingness to invest through downturns could overcome established positions.
V. Key Inflection Point #1: The Tsuga Turnaround (2012-2021)
New Leadership, New Direction
The move is in line with the strategy adopted by company President Tsuga since he took charge in June 2012. Panasonic is trying to engineer a turnaround away from low-margin consumer electronics goods to products catering to automakers and other business clients. Tsuga has warned that he would weed out any division that fails to meet a 5 percent operating margin goal within three years. Non-core assets like its healthcare unit are also being sold as he overhauls the company. Panasonic agreed last month to sell the healthcare business, which makes blood sugar monitoring devices and electronic record-keeping systems, to U.S. private equity firm KKR & Co in a $1.67 billion deal.
Kazuhiro Tsuga understood something his predecessors had not: the consumer electronics game was over for Japanese manufacturers. The future lay in B2B—batteries for Tesla, automotive systems for global automakers, supply chain software for enterprises. The question was whether Panasonic could execute the pivot before its cash reserves ran out.
Strategic Divestitures
The list of divestitures tells the story of a company shedding its past. In January 2021, the company announced that it would end its solar panel production, citing increasing price competition from Chinese manufacturers. The 70-year-old television division was confirmed to be discontinued. Once a major revenue source, Panasonic TVs had struggled against competition from Korean and Chinese brands, leading to losses since 2010.
From an economic view point this was probably the right decision as Panasonic has reported 120.4 billion yen ($1.17 billion) in profits for the fiscal year ending March 2014, compared with 754 billion yen losses last year.
The speed of the turnaround was remarkable. By focusing relentlessly on margin improvement and exiting bleeding businesses, Tsuga transformed Panasonic from a company hemorrhaging cash to one generating substantial operating profits—even if the glamour of the consumer electronics era was gone.
The B2B Pivot
Better known for its consumer electronics and appliances, Panasonic in recent years focused more on building parts and supplying services to other businesses, such as batteries for Tesla Inc's electric cars.
Once a global leader in consumer electronics, Panasonic is now a key battery supplier to Tesla Inc. and investing in software, while seeking to retain its relevance in appliances and industrial devices.
After guiding Panasonic's return to profitability and positioning the group for sustainable growth under a new business model, Kazuhiro Tsuga stepped down as CEO on April 1, 2021. His legacy was a company fundamentally transformed—no longer a consumer electronics giant, but not yet a clearly defined B2B powerhouse either.
For investors, the Tsuga era demonstrates both the possibilities and limitations of corporate turnarounds. He saved the company from potential bankruptcy and created the foundation for future growth. But the fundamental question of what Panasonic is—beyond a diversified holding company with batteries as its most exciting asset—remained unanswered.
VI. Key Inflection Point #2: The Tesla Partnership (2009-Present)
The Beginning of a Transformative Alliance
The ties between Tesla and Panasonic go deep. In 2009, only one year after Tesla released its first-ever car, the Tesla Roadster, two companies signed the first initial supply agreement. One year later, the Japanese giant moved to tighten its ties and invested in $30 million worth of common stock Tesla. In 2011, the partners entered a fruitful era of business by signing a supply agreement for automotive-grade lithium-ion battery cells for 80,000 electric vehicles.
This early bet on Tesla—when the EV maker was little more than a Silicon Valley startup with dreams of electric sports cars—would prove to be the most consequential strategic decision in Panasonic's modern history.
"This expanded agreement with Panasonic is important to Tesla as we continue to increase the pace of production," said Tesla Co-Founder and CEO Elon Musk. "We look forward to strengthening our relationship with Panasonic, and I'm confident that this partnership will continue to be an integral part of Tesla's success for years to come." Together, Panasonic and Tesla have developed a next-generation battery cell technology that provides the highest energy density and best performance cells in the market. Panasonic's cylindrical cell is a customized technology designed specifically for optimizing electric vehicle quality and life.
The Gigafactory Bet
The next big step came as the announcement of the Gigafactory Tesla, in which the EV maker signed an agreement with Panasonic in July 2014 to build the giant facility in Nevada together. A marvel of its time, with a 35 GWh capacity, the Gigafactory could have doubled the entire worldwide lithium-ion supply.
In July 2014, it was announced that Panasonic had reached a basic agreement with Tesla to invest in a factory, estimated to cost $5 billion. The northern Nevada site and plans were announced with state officials on September 4, 2014. Panasonic agreed to lead the battery cell production portion of the manufacturing, and Tesla CEO Elon Musk indicated in 2015 that the total Panasonic investment would be US$1.5–2 billion.
The structure was innovative: Tesla and Panasonic built guardrails against that. Tesla committed to purchasing large quantities of batteries over the next decade. Panasonic agreed to invest between $1.6 billion and $2 billion in the production lines. Neither company could afford to walk away. This model of shared investment and shared benefit made both sides accountable for quality, cost, and performance.
Scale and Impact
By 2018, Gigafactory 1 was producing over 20 gigawatt-hours of battery cells per year. Tesla called it the world's highest-output battery plant. The scale of the Gigafactory unlocked economies no small plant could match.
Panasonic delivered three million battery cells daily to Tesla in 2018.
Lower pack costs meant cheaper cars. That enabled Tesla to release the Model 3 and Model Y—two of the most popular EVs ever sold.
Battery pack costs fell from approximately $1,000/kWh (2010) to under $200/kWh (2020), accelerating EV adoption.
At the end of 2019, Panasonic had 3000 US workers and 200 Japanese technicians at Gigafactory 1, and quality had improved to increase production to a rate of 30 GWh/year on the same equipment. Panasonic occupies more than half of the factory, operating 13 cell lines. In early 2021, Panasonic had its first annual profit in Gigafactory. By 2022, Panasonic had shipped more than 6 billion cells from Gigafactory.
Tensions and Evolution
Following this development, in January 2019, Panasonic also set out to seek new partners. It announced a partnership with Toyota to produce prismatic batteries, which formed a joint venture in 2020.
In June 2021, it was reported that Panasonic sold its entire stake in Tesla for approximately $3.6 billion—a massive return on the original $30 million investment, though the timing meant Panasonic missed the subsequent run-up in Tesla's stock price.
Tesla received 4680 battery cell samples from Panasonic in 2020, and the latter unveiled its Tesla 4680 battery cell in 2021, with plans to pour $700 million into producing the new battery in Japan.
Current Battery Strategy
Panasonic Energy has also begun mass production of 2170 cells at the second North American facility, the Kansas Factory, with plans to establish an annual production capacity of approximately 32 GWh in the future. As the company's second EV battery production site in the region, following the Nevada Factory, which has been operating since 2017 with the current annual capacity of approximately 41 GWh, the Kansas Factory aims to significantly boost Panasonic Energy's U.S.-based production capacity to approximately 73 GWh once fully operational.
Panasonic Energy has officially opened its new cylindrical lithium-ion battery factory in De Soto, Kansas, marking a significant expansion of North American EV battery manufacturing capacity. The grand opening ceremony on July 14 celebrates one of North America's largest automotive battery plants, which has already begun mass production of 2170 cells. The company has already hired 1,100 employees at the Kansas location and has begun manufacturing operations with plans to eventually reach an annual production capacity of 32 GWh.
On December 13, 2022, Panasonic Energy Co., Ltd., and Lucid Group, Inc. announced they have entered into multi-year agreements to supply batteries for Lucid's award-winning luxury electric vehicle, Lucid Air, the fastest-charging, longest range EV on the market, and Lucid's upcoming Gravity SUV. The agreement marks another milestone in Panasonic's plans to expand production of lithium-ion EV batteries beyond Japan and into the U.S.
Panasonic aims to develop an innovative EV battery for Tesla: Panasonic, one of the world's leading battery manufacturers and a longtime supplier to Tesla, has unveiled ambitious plans to develop a revolutionary electric vehicle (EV) battery within the next two years. Announced on September 18, 2025, this innovation centers on anode-free battery technology that promises to transform the EV industry by significantly boosting energy density, extending driving ranges, and potentially lowering costs. At the heart of this development lies Panasonic's anode-free design. Panasonic estimates that Tesla's Model Y, its most affordable sport-utility vehicle, could see an increase of nearly 90 miles (145 kilometers) in range with the same battery pack size.
For investors, the Tesla partnership represents both Panasonic's greatest asset and its greatest risk. The relationship has transformed the company's battery business from a component of consumer electronics to a potential growth engine. But concentration risk looms large—and competitors are gaining ground.
VII. Key Inflection Point #3: The 2022 Holding Company Transformation
Restructuring Rationale
On November 19, 2020, Panasonic announced a restructuring set to be completed by 2022 in which the company would spin off the domain companies as wholly owned subsidiaries while transforming itself into the holding company named Panasonic Holdings Corporation. The model was similar to what Sony had done on April 1, 2021, when Sony Corporation became Sony Group Corporation.
Panasonic adopted a holding company structure two years ago, a revamp aimed at making each division more accountable for its performance. That also made it easier for Kusumi to forge deals like the one involving its automotive systems unit, part of which is being sold to affiliates of Apollo Global Management Inc. for ÂĄ311 billion.
The rationale was clear: the business environment surrounding the Panasonic Group was undergoing increasingly severe changes year by year, including political and financial circumstances in each country, the widespread of protectionism, and the downturn of market conditions due to the impact of COVID-19. Under such ongoing uncertainties, the company resolved to transition to a holding company system in order to further enhance group management from a medium- to long-term perspective and to ensure growth.
New Leadership
Yuki Kusumi, Group CEO of Panasonic Holdings Corporation, became the opening keynote speaker for CES 2025 on January 7. With a long and distinguished career in research and development (R&D) and company management, Kusumi is passionate about innovation, digital transformation, and combatting environmental issues for a better, brighter future for everyone.
Yuki Kusumi entered Panasonic Corporation in 1989 following graduation from Kyoto University Graduate School's Faculty of Engineering. He was involved in the research and development of software technology, contributing to the launch of digital broadcasting, before starting a two-year term as the head of Panasonic's European R&D Center in London in 2002. After positions of responsibility at Panasonic AVC Networks, Inc. and Appliances Company, he joined the Automotive & Industrial Systems Company in 2018.
Panasonic Holdings Corp.'s managers need to feel more of a "sense of crisis" given the company's low profitability and will be judged accordingly, Chief Executive Officer Yuki Kusumi said. "If they don't produce results, they will have to be replaced," Kusumi said in a recent interview. "The reason for not producing results is the lack of a sense of crisis." Those are unusually harsh words in Japan, and especially at Panasonic, where the notion of lifetime employment was embraced for years. Two months ago, Kusumi warned in a strategy briefing that the Osaka-based Japanese electronics maker was falling behind on its profitability targets, and that he would reduce the number of "businesses with issues" to zero by March 2027.
After taking over as CEO in mid-2021, Kusumi has been seeking to free up more cash to invest in areas of growth. He's set goals to achieve a return on equity of 10% or more and cumulative operating profit of ÂĄ1.5 trillion for the two fiscal years through April of next year.
In the FY2023–2025 Medium-Term Strategy we have been aiming for growth by designating three business areas as priority investment areas: Automotive Batteries, air quality and air conditioning (A2W in Europe), and SCM software. However, the European A2W market is currently undergoing significant changes, and the business environment for automotive batteries has changed significantly since the Medium-Term Strategy was formulated three years ago. Nevertheless, we believe that the EV market will continue to grow, albeit at a slower pace, and we will continue to invest in line with the needs of vehicle manufacturers.
Major Strategic Moves
The holding company structure has enabled more aggressive portfolio management. Apollo announced that funds managed by Apollo affiliates have entered into a definitive agreement to acquire a majority stake in Panasonic Automotive Systems Corporation, a global leader in advanced automotive solutions, including integrated cockpit systems and in-vehicle electronics, from Panasonic Holdings Corporation in a transaction valued at a total enterprise value of ÂĄ311 billion, subject to certain adjustments at closing. Panasonic will retain a minority stake in the Company, which will maintain its strategic relationship with Panasonic Group.
Apollo had approximately $733 billion of assets under management. Panasonic Automotive Systems Co., Ltd. was launched on April 1, 2022 as an operating company responsible for the automotive systems business in line with the start of the Panasonic Group's operating company system, and on December 2, 2024 the company moved to a management structure in which 80% of its shares are held by the funds managed by an affiliate of Apollo Global Management Inc., and 20% by Panasonic Holdings Corporation.
Panasonic Holdings Corp. will seek to improve the profitability of underperforming units over the next two years while considering whether it's the "best owner" for the businesses, Chief Executive Officer Yuki Kusumi said. The Japanese electronics maker's decision last year to sell part of its automotive systems unit to affiliates of Apollo Global Management Inc. for ÂĄ311 billion ($2 billion) was driven by such considerations, Kusumi said in a group interview Tuesday. "But our goal is not to sell," he added.
The Blue Yonder acquisition represents another major strategic bet. Panasonic acquired supply chain software company Blue Yonder in a deal valued at $7.1 billion. The figure includes Panasonic's purchase of the remaining 80% of shares in Blue Yonder for $5.6 billion, plus debt.
"We would like to realize a world where waste is autonomously eliminated from all supply chain operations," Panasonic CEO Yuki Kusumi said in a statement. "There are still many such losses and stagnation in supply chain operations."
Blue Yonder (formerly JDA) develops AI-based supply chain software for the retail and manufacturing sectors, and represents Panasonic's largest acquisition in a decade. "We have developed mutual trust and have a shared vision for an autonomous supply chain that delivers a better life and a better world," Blue Yonder CEO Girish Rishi said.
For investors, the holding company transformation creates both opportunities and challenges. On one hand, the structure enables more transparent performance tracking and easier divestitures. On the other, it raises questions about strategic coherence: is Panasonic Holdings a focused industrial company, a conglomerate, or something in between?
VIII. The Battery Business: Competitive Dynamics and Outlook
Market Position
In 2024, China's CALB was fourth with a 4.4 percent share, South Korea's SK On was fifth with about 4.4 percent, and Japan's Panasonic was sixth with 3.9 percent. Samsung SDI of South Korea, China's Gotion High-tech, Eve Energy, and Sunwoda ranked seventh, eighth, ninth, and tenth.
This represents a significant decline from Panasonic's earlier market position. The top three battery makers (CATL, BYD, LG) collectively account for two-thirds (66%) of total battery deployment. Once a leader in the EV battery business, Panasonic now holds the fourth position with an 8% market share, down from 9% last year.
Panasonic, who supplies its battery mainly to Tesla, ranked 6th in the list with 35.1GWh of its battery used in 2024, but posted an 18.0% YoY degrowth. The major reason for Panasonic's degrowth were a decline in sales of Tesla Model 3 due to facelift transformation early 2024 and Tesla's degrowth in sales in 2024. Panasonic, though, is expected to rapidly regain its market share mainly focusing on Tesla in the North American market by launching its advanced 2170 and 4680 cells supplied to Tesla.
Panasonic mainly supplies Tesla and has accelerated the restructuring of its supply chain in response to the recent tightening of US tariffs on Chinese batteries and raw materials. These efforts are expected to lay a significant foundation for recovery in the usage of batteries made by Panasonic and maintaining its market share in the North American market.
Kansas Factory: The North American Bet
Once completed, the $4 billion, 4.7-million-square-foot facility will be the largest battery manufacturing plant in the world.
By introducing labor-saving production lines, the Kansas Factory is expected to achieve approximately 20 percent higher productivity compared to the Nevada Factory. In the near future, Panasonic Energy plans to introduce products using advanced materials that will increase cell capacity by around five percent.
As the largest economic development project in Kansas state history, the factory is expected to create up to 4,000 direct jobs and approximately 8,000 jobs in total, including those in supplier and related industries. Panasonic Energy is also collaborating with institutions such as the University of Kansas to promote long-term industry-academia partnerships focused on technological advancement and specialized talent development.
However, the celebration comes just days after reports that Panasonic plans to delay reaching full production capacity at the facility due to declining electric vehicle sales and shifting U.S. policies under the Trump administration. The plant was originally expected to reach full production by March 2027, but the company has not yet announced a new target date. This adjustment comes as Panasonic's primary customer for these batteries, Tesla, experiences softening demand for electric vehicles in the US market. A significant factor in the production delay appears to be recent policy changes under President Trump. His administration's "big, beautiful bill" eliminates tax credits for electric vehicle purchases effective September 30, along with reducing or eliminating various green energy incentives.
Technology Roadmap
Panasonic has finalized preparations to begin manufacturing 4680-format lithium-ion battery cells at a Japanese factory, Reuters reported. The company is reportedly sending sample cells produced at the factory in Japan's western prefecture of Wakayama to automaker customers for approval, with production to start once that approval is received. Panasonic supplies batteries to Tesla, which has been one of the principal advocates for 4680 cells, so named because they measure 46 millimeters in diameter and 80 inches tall. The bigger cells have been championed by Tesla CEO Elon Musk since 2020 as the key to unlocking cheaper electric cars.
IX. Bull and Bear Cases: A Strategic Analysis
Porter's Five Forces Analysis
Supplier Power: MODERATE Battery manufacturing requires access to critical minerals—lithium, nickel, cobalt, manganese. Panasonic has been working to secure supply through agreements with Redwood Materials for recycled materials, Sila Nanotechnologies for silicon anode materials, and Novonix for graphite. However, Chinese suppliers still dominate many critical material categories, creating geopolitical risk.
Buyer Power: HIGH Tesla represents a massive concentration of revenue for Panasonic Energy. While the Lucid partnership and Kansas factory diversify the customer base, Tesla's bargaining power remains substantial. If Tesla accelerates its own battery production or shifts to Chinese suppliers, Panasonic would be significantly impacted.
Threat of New Entrants: LOW TO MODERATE Battery manufacturing requires billions in capital investment and decades of accumulated know-how. However, Chinese manufacturers have demonstrated ability to rapidly scale and compete on cost, suggesting the barriers may be lower than incumbents believed.
Threat of Substitutes: MODERATE Solid-state batteries, sodium-ion batteries, and other next-generation technologies could eventually disrupt lithium-ion dominance. Panasonic is investing in these technologies but faces competition from well-funded startups and Asian rivals.
Competitive Rivalry: VERY HIGH CATL continued to be the world's largest power battery manufacturer in 2024, with a 37.9 percent share above the 36.6 percent in 2023. BYD's share of 17.2 percent in 2024 was also higher than the 15.9 percent in 2023. Chinese manufacturers are gaining share through aggressive pricing and continuous technological improvement. Korean rivals remain formidable. Panasonic faces a multi-front competitive war.
Hamilton Helmer's 7 Powers Analysis
Scale Economies: Panasonic has significant scale in cylindrical battery production, but CATL's overall scale dwarfs it. The Kansas factory helps, but Chinese rivals are building even larger facilities.
Network Effects: Limited. Battery manufacturing is primarily a scale and cost business, not a network effects business.
Counter-Positioning: This is potentially Panasonic's strongest power. By focusing on premium cylindrical cells for Tesla and luxury EVs (Lucid), Panasonic may be adopting a strategy that Chinese LFP-focused manufacturers cannot easily imitate without cannibalizing their own positioning.
Switching Costs: Moderate. Automakers invest significant engineering in battery pack design, creating some lock-in. But multiple suppliers are now capable of producing equivalent cells, reducing switching costs over time.
Cornered Resource: Panasonic's deep partnership with Tesla and accumulated know-how in cylindrical cell manufacturing represent potentially unique resources. The 30+ year relationship provides tacit knowledge that cannot be easily replicated.
Process Power: Panasonic claims approximately 20% higher productivity at the Kansas factory compared to Nevada, suggesting ongoing process improvements. However, it's unclear whether this creates sustainable advantage versus competitors who are also improving.
Branding: Limited relevance in B2B battery sales. Panasonic's brand matters more in consumer appliances than industrial batteries.
Bull Case
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North American Battery Champion: The combination of the Nevada expansion and Kansas factory positions Panasonic as the leading non-Asian battery supplier in North America. IRA incentives and potential tariffs on Chinese batteries create a protected market where Panasonic can thrive.
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Tesla Relationship Endures: Despite diversification by both parties, the Tesla-Panasonic relationship remains deep and mutually beneficial. Panasonic's advanced 4680 cells and anode-free technology could strengthen this partnership further.
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Customer Diversification Succeeds: Lucid, Toyota JV, and other partnerships reduce Tesla concentration risk while maintaining premium positioning.
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Blue Yonder Delivers: The $7.1 billion software bet pays off through AI-driven supply chain optimization, creating a high-margin recurring revenue stream.
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EV Adoption Accelerates: Despite near-term headwinds, the long-term trajectory toward electrification resumes, driving battery demand growth.
Bear Case
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Chinese Competition Overwhelms: CATL and BYD continue gaining share through relentless cost reduction and technology improvement. Panasonic's premium positioning erodes as Chinese rivals move upmarket.
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Tesla Relationship Deteriorates: Tesla expands its own battery production and shifts to Chinese suppliers, reducing Panasonic's largest customer relationship.
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Policy Uncertainty: Changes to IRA incentives and EV tax credits reduce the policy tailwinds that have supported North American battery manufacturing investment.
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Technology Disruption: Solid-state batteries or other next-generation technologies reach commercialization faster than expected, obsoleting Panasonic's lithium-ion investments.
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Holding Company Complexity: The diversified portfolio creates confusion about Panasonic's core identity, leading to a persistent conglomerate discount.
X. Key Performance Indicators for Investors
For investors tracking Panasonic Holdings, three KPIs matter most:
1. EV Battery Segment Operating Margin
The battery business is Panasonic's growth engine, but growth without profitability is value destruction. Panasonic Energy achieved its first annual profit at the Nevada Gigafactory in 2021 after years of losses. Investors should track whether the Kansas factory achieves profitability faster as evidence of learning curve effects, and whether overall battery segment margins expand toward the company's stated 5%+ operating margin target.
2. Battery Production Capacity Utilization
When combined with Panasonic's existing Nevada factory (currently at 41 GWh capacity), the Kansas plant would boost the company's total US production capacity to approximately 73 GWh once fully operational. However, according to reports from Nikkei Asia, Panasonic is adjusting its timeline for reaching full production. The plant was originally expected to reach full production by March 2027.
Capacity without demand is worthless. The Kansas factory delay signals potential demand softness. Investors should track actual production volumes versus installed capacity as a leading indicator of EV demand and Panasonic's competitive position.
3. Customer Concentration (Tesla % of Battery Revenue)
Panasonic does not separately disclose Tesla's share of battery revenue, but investors can infer it from volume data and Tesla's production numbers. Declining concentration through Lucid, Toyota JV, and other partnerships would reduce risk; maintained or increasing concentration would heighten it.
XI. Regulatory and Accounting Considerations
Regulatory Risks
IRA Policy Uncertainty: A significant factor in the production delay appears to be recent policy changes under President Trump. His administration's "big, beautiful bill" eliminates tax credits for electric vehicle purchases effective September 30, along with reducing or eliminating various green energy incentives.
China Trade Tensions: Panasonic's efforts to reduce Chinese supply chain dependence create both opportunities (protected North American market) and costs (higher input prices).
Accounting Considerations
Goodwill from Blue Yonder: The $7.1 billion acquisition creates substantial goodwill that could require impairment testing if the software business underperforms.
Pension Obligations: As a century-old Japanese company, Panasonic carries significant pension liabilities that require monitoring.
Currency Effects: The company reports in yen but generates substantial dollar-denominated revenue from U.S. battery operations. Exchange rate fluctuations can significantly impact reported results.
XII. Conclusion: The God of Management's Company at a Crossroads
Konosuke Matsushita, who founded the company that bore his name until it was changed to Panasonic in 2008, is sometimes referred to as the "god of management" in Japan. He espoused principles such as cooperation, humility and contribution to society as key pillars for any successful company. By the same token, Matsushita also pushed for adaptability and continuous improvement. "Management, especially upper management, such as division managers and the presidents of the business units, need to feel a strong sense of crisis about the lack of results," Kusumi said.
That sense of crisis animates Panasonic today. The company that Matsushita built from a basement tenement into a global electronics empire has weathered wars, technological disruptions, and near-bankruptcy. Now it faces perhaps its most consequential transformation: from consumer electronics giant to battery-focused industrial company.
The pieces are in place. The Tesla relationship, however volatile, remains valuable. The Kansas factory represents a major bet on North American EV manufacturing. The Blue Yonder acquisition opens software opportunities. The holding company structure enables strategic flexibility.
But the competitive landscape has never been more challenging. Chinese battery makers are gaining share relentlessly. Policy uncertainty clouds the regulatory environment. And the fundamental question—what is Panasonic, really?—remains unanswered.
I made the announcement at a time when the final year of the current Medium-Term Strategy had not yet ended, and although many people viewed the 3Q financial results announced the same day as relatively positive—with increased revenue and profit on a non-consolidated basis excluding the Automotive Business—many were also surprised by the announcement of major management reforms. The fact is, I am still not satisfied with the state of our business, and I continue to feel a strong sense of crisis.
Konosuke Matsushita would likely recognize that crisis—and perhaps approve. He built his empire not through complacency but through constant adaptation, relentless improvement, and an unshakeable conviction that serving society through efficient production was both a moral duty and a path to sustainable profits.
Whether Yuki Kusumi can channel that founder's spirit to navigate Panasonic through its next century remains to be seen. But the story of Panasonic—from basement tenement to global powerhouse to crisis to reinvention—reminds us that great companies are never finished being built. They are, as Matsushita might say, always in a state of becoming.
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