Battery Giant Exits, Terminates Energy Storage Business
On May 6, 2025, it was reported that battery giant Panasonic plans to shut down its solar and energy storage business unit. The company stated on its website, “We have decided to terminate the solar and energy storage business line. This adjustment allows us to focus on areas that have the greatest strategic impact. We remain confident in solar and energy storage technologies and appreciate the support from our partners and customers throughout this journey.”
As one of the leading global suppliers of energy storage batteries, Panasonic entered the energy storage market quite early. In 2008, Panasonic began its collaboration with Tesla, supplying the automaker with advanced lithium-ion battery technology for power. The joint venture established the “Giga Factory 1” in Nevada, USA, which was one of the most advanced battery production facilities at that time. In 2013, Power-One and Panasonic announced a partnership to develop energy storage systems and large utility-scale and commercial photovoltaic inverters.
In 2024, Panasonic reported that the increase in sales of data center energy storage systems offset the decline in demand for automotive batteries, leading to a 42% year-over-year increase in operating profit for its energy division in the third quarter.
However, just six months later, Panasonic decided to abandon its once-promising energy storage business due to financial strains. In February of this year, Panasonic announced plans to reduce fixed costs in lower-growth potential sectors such as industrial equipment, kitchen appliances, and televisions, in order to transform the company and focus on more profitable areas. The company aims to achieve more than ¥150 billion in profit improvement by the fiscal year 2026, and further total improvements of over ¥300 billion by 2028. This plan includes integrating the company’s infrastructure across production, sales, and logistics, potentially even involving the splitting of its retail chain for home appliances and lighting.
Thus, the termination of the energy storage and solar business is part of Panasonic’s broader reform strategy. This decision appears to be well-considered, especially given that since 2024, the energy storage industry has entered a new adjustment phase. Many companies have noticeably slowed their expansion efforts and adopted more cautious business strategies to face the impending market challenges. This year, energy storage firms have encountered unprecedented difficulties, with significant losses reported in key photovoltaic manufacturing segments, and the energy storage sector caught in a price war.
Many companies, particularly small and medium-sized enterprises, are facing severe survival challenges, with the risk of marginalization or bankruptcy looming. Statistics indicate that over 30,000 energy storage companies are currently in various abnormal states such as deregistration, revocation, liquidation, suspension, or closure. Therefore, the industry widely anticipates a deep restructuring of the energy storage sector by 2025, making Panasonic’s exit a potential strategy to mitigate risks and pursue stable development.
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