As the growing popularity of hybrid and electric vehicles makes batteries a crucial car component, the need for reliable supplies of high-performance batteries has been fueling reorganizations of the automobile, materials and electronics industries.
- Sanyo's lithium ion battery plant in Hyogo Prefecture.
Such tectonic shifts were recently illustrated by Toyota Motor Corp.'s decision to use Sanyo Electric Co.'s lithium ion batteries in its strategic Prius minivan, a hybrid due for launch early next year.
The move marks a major departure from the leading carmaker's past practice. Toyota has fitted its Prius lineup with nickel-metal hydride batteries ever since the first generation in 1997.
After having developed and produced hybrid-car batteries with Panasonic Corp. it was a big decision for Toyota to turn to an outsider for the key component -- even considering that Sanyo will become a 100% unit of Panasonic next spring. But switching to lithium ion batteries will bring benefits that outweigh the risk, since they are more powerful and smaller -- enabling Toyota to bolster the fuel economy and interior sizes of its hybrid vehicles.
Today, Sanyo is the global leader in lithium ion batteries. In the green-car battery category, the company now counts Suzuki Motor Corp, Ford Motor Co. and Volkswagen AG among its customers.
Toyota, however, had set its sights on Sanyo much earlier. Back around 2005, when Sanyo was facing financial difficulty, Toyota asked the firm for a factory tour, with the aim of assessing the company's technologies.
Looking back, a Toyota executive confides, "We very much wanted Sanyo's battery technologies." After careful analysis, the automaker concluded that "Sanyo is valuable enough to warrant an acquisition," the executive says.
Even though the management turmoil at Sanyo back then ultimately kept Toyota from making an overture, Sanyo's value as an acquisition target remained intact.
In fact, Panasonic is about to fully acquire Sanyo through a tender offer. Panasonic will have spent over 800 billion yen on the purchase by the time it converts Sanyo into a wholly owned unit.
Panasonic reckons the investment will pay off. Sanyo is expected to play a key role in Panasonic's plans to lift sales in the environment and energy fields roughly sixfold to a whopping 3 trillion yen by fiscal 2018. Toward this goal, the two companies aim to work together to ensure that they will secure the leading position in the increasingly important market for hybrid- and electric-vehicle batteries.
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