There’s one business Sony 6758.TO +1.17%
has clung to despite pressure to do otherwise: its lithium-ion battery unit.
Chief Executive Kazuo Hirai
emphasized in early February that the company sees its battery business as essential to growth of smartphones and other mobile devices. But now, it looks like the company has another incentive.
On Wednesday, Sony indicated it’s also betting on future demand for batteries for use in big energy storage systems for power grids.
The Japanese tech giant said it will form a joint venture with Canadian electric utility Hydro-Quebec to research and develop a large-scale energy storage system combining their know-how in lithium-ion rechargeable batteries. The new company,
to be based in Varenne, Quebec, will be formed in June.
Sony said in a statement it expects demand for such storage systems will increase since they stabilize fluctuations in electricity caused by the spread of renewable energy sources such as solar and wind power. Power outages and natural disasters such as Japan’s Fukushima Daiichi nuclear accident in March 2011 have also underscored the need for stable energy storage systems.
While it’s still unclear whether the research and development venture will lead to actual business opportunities, Sony officials say they consider storage systems to be one growth area for its battery business. The company already supplies energy storage systems for homes and offices, but it will be the first time for Sony to explore large-scale systems.
“We will aim to expand our business using the technology produced through our joint development,” Yoshito Ezure, Sony’s senior vice president said in the statement.
Sony’s decision to keep its battery unit had been surprising in some ways since Hirai has lately taken painful steps highlighted by its planned sale of its slumping personal computer business.
While Japanese companies have long been the pioneer of lithium-ion batteries, analysts have said batteries – like TV panels – are rapidly becoming commoditized with the rise of competition from Korean rivals. Government officials have long hoped for and negotiated with Sony to combine its battery business with its Japanese peers to help the country maintain its competitive edge.
For the quarter ended in December, Sony posted an operating loss of Y23.8 billion for its devices segment due to an impairment charge for its battery business. In announcing the result in February, Hirai said that Sony would focus on lithium-ion polymer batteries
used in smartphones and tablets while scaling down other commoditized types of batteries.
With this latest joint venture, Sony will also bank on energy storage systems to help its battery business survive.
Apr 16, 2014, WSJ.