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In 2017, as Korean power battery companies expanded their production in China, Matsushita, a Japanese power battery giant, made a bold move into the Chinese market, signaling what many called its "SHOWTIME." With a 40% global share in on-vehicle lithium batteries, Matsushita announced a 100 billion yen investment to boost production in Japan, China, and the U.S., focusing on pure electric vehicle (EV) battery manufacturing. Notably, a second facility was planned for Dalian, doubling the production capacity. This came just months after the Dalian plant officially started operations in April, and shortly after announcing a new plant in Jiangsu, making it clear that Matsushita was heavily investing in the Chinese power battery sector.
This strategy wasn't entirely unexpected. Domestic new energy vehicle (NEV) production in China surged by 40.9% in the first three quarters of 2017, reaching 396,000 units. This growth led to a 42.1% increase in domestic battery production, hitting 32.02 GWh—surpassing the full-year output of 2016. As the fourth quarter approached, industry experts anticipated even greater figures.
While South Korean giants like Samsung and LG had also entered the Chinese market with ambitious plans, their results were mixed. Samsung’s Xi’an and Tianjin plants faced operational challenges, including idle production lines and equity sales. Similarly, LG’s Nanjing factory struggled with low utilization rates. In contrast, Matsushita took a more measured approach, launching its first Chinese plant in Dalian in 2015, but only officially opening it in 2017. The company then quickly moved forward with plans for a Jiangsu facility, aiming to start production in late 2017.
Matsushita’s slower but more strategic entry allowed it to avoid some of the pitfalls that affected its Korean rivals. A key factor was the evolving regulatory environment in China. While early policies created barriers for foreign battery companies, recent updates have made it easier for them to enter the recommended vehicle lists. For example, batteries from Sino-Japanese joint ventures like AESC and Sanyo now appear in official recommendations, signaling a more open market.
Another potential driver for Matsushita’s expansion is its close relationship with Tesla. The automaker has faced significant production delays due to battery shortages, and rumors of Tesla building a factory in China have been circulating. Panasonic, as a key supplier to Tesla, may be expanding in China to meet growing demand. Reports suggest that the Jiangsu plant, located near Shanghai, could be specifically designed to support Tesla’s future battery needs in the region.
Despite these opportunities, Matsushita still faces strong competition from domestic leaders like CATL and BYD, which have built robust supply chains and gained significant market share. However, Matsushita’s reputation for high-quality batteries and its existing partnerships with Chinese automakers give it a competitive edge. While it remains to be seen whether Matsushita can replicate the success of its Korean counterparts or carve out a unique position, its strategic moves in 2017 indicate a long-term commitment to the Chinese market.