Panasonic Battles to Reinvent Itself as Rivals Surge Ahead

As of September 2025, Panasonic, the once-dominant Japanese consumer electronics group, is facing a critical juncture in its history. While rivals like Hitachi, Sony, and NEC have successfully executed painful business transformations, surging in value over the past decade, Panasonic has struggled to keep pace.

The Osaka-based conglomerate, which produces everything from Tesla's EV batteries to hairdryers, unveiled a restructuring plan in May 2025 to cut 10,000 jobs and streamline its portfolio. However, investors are still waiting for a coherent strategy to boost profitability and sales at the 107-year-old company.

Panasonic's battery business, a key focus area, remains reliant on $121 billion in annual Inflation Reduction Act tax credits, equivalent to a third of the company's net profit. These credits, however, are set to taper off by 2032, adding to the company's challenges.

Meanwhile, Panasonic's $7.1 billion acquisition of supply chain software provider Blue Yonder in 2021 has also been a disappointment, with the touted listing going quiet and the executive responsible for the deal stepping down last month.

As the company looks to reinvent itself, it is targeting a shift towards AI-driven hardware, software, and solutions, aiming for these to account for 30% of revenues by 2035, up from just 2.5% today. However, the legacy of Panasonic's past success and its founder's "water tap" philosophy have made this mindset shift extremely difficult.