Panasonic eyes upstream investment in battery raw materials

By IM Staff
Published: Tuesday, 26 February 2019

The growth in demand for electric vehicles has pushed Japanese electronics manufacturer Panasonic to investigate investments in battery raw materials, but this will not include the purchase of a mine.

Japanese electronics manufacturer Panasonic is considering investment in the upstream part of the battery raw materials industry in order to have better oversight of quality, pricing and supply chain responsibility, a company executive has said.

The move has been led by the company’s growing consumption of raw materials for batteries due to rapid growth in demand for electric vehicles (EVs), according to Kazunori Tanaka, general manager of the group’s electronic device materials department.

"The chain is longer, so to understand and control the chain is not possible. In order to have more control over the supply chain, Panasonic has made purchases of raw materials by itself," he said.

"In the future, we intend to go upstream to purchase intermediates and try to get a more clear picture of the supply chain. We would like to establish long-term strategic partnerships with upstream companies," Tanaka added.

The EV expansion "spurred a revolution in the automotive industry that no one had experienced before," he said on the sidelines of the 25th Mining Indaba in Cape Town, South Africa.

News9  
iStock 

"It is very difficult to predict future actions, but many people believe that in the future we may have trouble in securing raw materials. We have to carefully consider how to secure raw materials with a steady price in the future," he said.

But this would not include buying a mine.

Carmaker Ford recently said during an interview with Fastmarkets that it was looking into being more collaborative in its partnerships to source its raw materials. And while such a move is not currently being considered, the carmaker has not ruled out eventually owning a mine.

Panasonic makes two main batteries for EVs: cylindrical lithium-ion batteries, which use a nickel-cobalt-aluminium chemistry; and prismatic cell batteries, which use a nickel-cobalt-manganese chemistry.

Tanaka said during a presentation at the event that, by 2030, lithium demand for consumption in batteries is forecast to be around 10 times the level recorded in 2015, with nickel consumption expected to rise 20-fold and cobalt demand five-fold in the same comparison.

Worries related to the ethical production of cobalt, particularly in the Democratic Republic of Congo, have made the company uneasy about securing supply in an already competitive market. "Our concern about responsible sourcing is one of the most important requirements," Tanaka said.

Meanwhile, lithium supply volumes are expanding, and "constructing a strong relationship with major producers is important," Tanaka said.

As for nickel, consumption will increase dramatically, he said, although its use in batteries as a portion of overall consumption trends is minor. But he noted that "securing nickel for chemical usage is getting more difficult."