Why Panasonic is pinning its future on the “electrification of society”

This year, ubiquitous electronics maker Panasonic will celebrate its 100th birthday. No mean feat for a technology company in an industry saturated with transient startups helmed by teenagers. At last year’s IFA show, Alphr spoke to Laurent Abadie, the man in charge of Panasonic Europe, about where the Japanese multinational is now and where it’s headed.

Why Panasonic is pinning its future on the “electrification of society”

Abadie joined Panasonic in 2004 as deputy managing director for Panasonic France, climbing the ranks to CEO and chairman of Panasonic Europe in 2009. At the dawn of the company’s centenary, we asked him what his vision is for a new age of renewable technology.

He prefaces his vision with a homage to Panasonic’s past, underlining that, even after a hundred years, “it’s still there”; something of a rarity in the fast-paced, forward-thinking tech world. “There are lots of values and principles which are still here, and this is very unique,” he notes.

As for the future, “[Panasonic] has a lot of advanced R&D for long-term issues. We’re not just a technology engineering company.” The company’s mantra is “what can we do to make the world better, to make life better?” Abadie explains that Panasonic is always adjusting its strategy based on what’s going on in the world.

laurent_abadie_panasonic_electrification

(Larent Abadie, CEO & Chairman of Panasonic Europe)

“Who could predict ten years ago that a revolution in car industries could come in? The next ten years in the automotive sector will show more changes than the last 100 years.” Abadie starts reeling off buzzwords: Autonomous cars. Electrification. Things like these are at the forefront of a “massive, massive transformation”. And where society goes, Panasonic wants to follow.

The electrification of society

Abadie is particularly enthused about renewables, and the “electrification” of society. This is symptomatic of a shift in the company’s focus; after all, one of Panasonic’s main business domains nowadays is energy – storage, end-to-end solutions, operation and maintenance services, and information and communications technologies. The company has been vocal about giving back to the grid, working on high-profile projects such as taking Macerich’s portfolio of malls solar.

We probed Abadie further on the role Panasonic has to play in the world of renewable energy: how far does Panasonic’s vision run? And will it extend to the UK?

Abadie acknowledges the pervasiveness of CO2 emission-reduction goals. “To achieve such important, strict targets, [we must move towards] the electrification of society.” The bulk of energy is still produced “with fossil origin”, he contends, with nuclear energy “basically shrinking”.

In terms of where the electrification of society will take place, Abadie admits that, yes, political incentive is largely concentrated in countries like Germany. According to Ernst & Young, Germany is the third-most attractive country in the world for renewable energy (after China and the US). Indeed, it generated 35% of its power in the first half of 2017 from renewables. The Western European powerhouse has a fully developed renewable energy industry; major players of the industry are either based there, as is the case with Siemens, Enercon, REpower and SolarWorld, or conduct large-scale operations there, such as Vestas and GE.

berlin_germany_evs_electric_vehicles_panasonic_100_years

(Germany is at the forefront of the clean energy revolution)

Meanwhile, the UK – although active on this front – is lagging behind (in 2016, only 8.9% of total energy consumption came from renewable sources), and could certainly do more to help accelerate the transformation. This also extends to Eastern Europe, he argues, where moves are being made to enact new and dynamic ways of electrification, but the transformation is nascent. Renewable energy is “kind of a global issue”.

“All carmakers are shifting their resources and their planning to EV”

We agree – it’s a global change that needs to be enacted. But this kind of technology can be expensive, which is off-putting at best and incapacitating at worst. It disincentives people from transitioning to renewable technology, despite widespread moral support for it. What does Abadie think of this dilemma?

“It’s a matter of return on investment. How long do you need to get return on your initial investment for the equipment? I think it should be less than five years. Five or six years.” Abadie concedes that this is no mean feat, and could pose a tough undertaking without a small subsidy, so might take some time. He believes the transformation will be fastest in the automotive sector rather than in the arena of, say, household equipment: “All carmakers are shifting their resources and their planning to EV [electric vehicles], so that might accelerate the transformation faster.”

Panasonic certainly plays an active role here, providing car batteries for Tesla. Does it feel the need to exert pressure on car companies to go electric?

There is no need, says Abadie. “We work with them, basically. Car manufacturers have a huge pressure on CO2 emission reduction; there are clear targets after the Paris meeting within Europe – there are commitments! And those commitments are given to auto companies and the car industry. They have no choice.”

ev_electrification

(Panasonic has collaborated with the likes of Tesla, producing batteries for EVs)

Panasonic’s role is to ease the automotive industry through this transition: “It’s kind of a new world [for them] because their expertise is on traditional mechanics […] which they’ve been producing and developing for almost 100 years. And now it’s about automatic cars, electric cars, it’s a completely different environment in terms of technology, in terms of connectivity, so for them it’s a big burden.” Panasonic aims to support traditional car companies in this overhaul.

Moving forward

The conversation steers back to Panasonic’s governing ethos. Are there any arenas of the tech world which Panasonic aims to eschew?

“As a general trend, our company is becoming more and more [a] B2B company.” He pauses, before adding “to C”. Panasonic, in less acronymous terms, works with other enterprises to facilitate their respective business with consumers.

“Originally Panasonic was founded 100 years ago and it used to be a pure consumer electronic company. It’s still the case, but [the] majority of our business is B2B now – 75-70% is B2B. B2B means partnering with energy companies, with automotive companies, with B2B solutions, and so on.”

Probed for examples, Abadie proffers: “We have a top share in in-flight entertainment – connectivity systems on the plane. You don’t see the Panasonic own-brand, but we are there. It’s our technology, it’s our product, it’s our software, it’s our services.”

It’s an issue of trust, explains Panasonic’s team. The company is well equipped and well versed in screen production, and exudes self-assuredness accordingly. “Because we know, because we built these things, so they trust us also to build screens into airplanes, into cars, into… everywhere.”

The company, aged 100, may be positively geriatric, but Panasonic’s showing no signs of slowing down just yet. A century looks good on the Japanese multinational, which emits a kind of humble wisdom as it collaborates with other businesses for a more energy-efficient world. A twinkly-eyed, triple-figured titan, quietly content with its longevity, quality and social conscience. One can’t help but ponder where the company will be in another hundred years.

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