Panasonic: Accelerating Capacity Expansion for Auto Rechargeable Batteries

We raise Panasonic’s fair value estimate to JPY 1,650 from JPY 1,400, mainly based on the more optimistic outlook for the automotive rechargeable battery business. At the company‘s strategy briefing held in early June, the company stated that it aims to increase its global production capacity for automotive rechargeable batteries to 200 gigawatt-hours by fiscal 2030 (ending March 2031). This is about four times the current capacity of over 50 GWh. Panasonic has been reluctant to build more plants as it has taken longer than expected to improve the profitability of the Nevada plant. We are therefore encouraged that Panasonic is now becoming more aggressive in capacity expansion. We believe that Panasonic’s shares are currently fairly valued.