Panasonic prioritizes electric car batteries over lithium-ion batteries

Panasonic Corp of Japan, maker of great electronics had announced Thursday that its Beijing factory will no longer produce lithium-ion batteries starting this month affecting 1,300 jobs and laying off of workers. Panasonic is going to concentrate on manufacturing on higher-margin products such as electric car batteries.

The 15-year old giant electronics plant produces batteries for simple mobile phones and digital cameras; however, both are more overtaken by the trending smartphones in popularity.

According to Panasonic spokeswoman Yayoi Watanabe that the global market for these products has been reducing and also added that the closure is not about the recent turmoil that battered Chinese markets but about the global technology trends. She also mentioned that employees were already informed of the closure since late July.

The plant closure comes as Panasonic restructures to focus on electric car batteries and energy home-saving systems instead of electronics like plasma TVs and smartphones where it faces tough competition from Asian rivals.

Panasonic inherited the factory in 2010 following the acquisition of Sanyo Electric Co. amounting to $4.6. They took over the plant which is a leading maker of lithium-ion batteries as well as solar panels.

The deal did not succeed to put growth to the business because of the many establishing South Korean Manufacturers as analysts say, and the Japanese firm has since sold several of Sanyo's operations.

The company signed an agreement in 2014 with Tesla Motors and announced in June 2015 that it has plans to invest $500 million in its own automotive business.

According to Panasonic's agreement with Tesla, the electronic company is going to be responsible for the "manufacture and supply cylindrical lithium-ion cells and invest in the associated equipment, machinery and other manufacturing tools" at the company's $5 billion Gigafactory in Nevada.

The firm is said to accept 30% to 40% of the cost of Tesla's $5 billion Gigafactory in Nevada plant in Nevada which is a key facility in the automaker's plans to increase sales.