Expansion of Demand in Consumer and Transportation Applications and for EVs

「EV demand in Europe, our main market, had still not shown a significant recovery, and overall demand for lithium-ion batteries remained weak. As a result, separator sales by our Group were also sluggish during the interim period.」

「In Europe, our main market, demand had still not recovered due to factors including the prolonged invasion of Ukraine and the impact of energy policies. In the US market, battery manufacturers were shifting applications from EVs to ESS in anticipation of increased demand for large data centers.」

「In Europe, our main market, active demand-creation measures have been introduced, including a new EU subsidy program for EV buyers and the launch of less expensive EV models, but growth in the European EV market continues to slow. In the US market, EV policies are also uncommitted, and growth in the secondary battery market remains stagnant.」

「The company faced difficult conditions as orders fell sharply after the second half began, following a slowdown in the European EV market driven by the termination of subsidies for EV buyers in Europe.」

「During the interim consolidated accounting period, the slowdown in EV demand growth, particularly in Europe, became pronounced. In the EV segment of our Group's core lithium-ion secondary battery separator business, orders from major customers did not decline significantly despite slower EV demand growth, and sales to automotive applications increased 47.2% year on year to ¥21,484 million. In consumer applications, production and shipments declined due to inventory adjustments for certain products, resulting in sales of ¥6,519 million, down 22.8% year on year. In the ion-exchange membrane business, shipments to a customer's plant in Argentina were completed, and ¥1,059 million in sales was recognized during the interim consolidated accounting period.」

「For automotive applications, growth in demand for automotive batteries has lost some of its earlier momentum as EV unit sales growth slowed following revisions to subsidy policies in Europe and China in the second half of last year. Even so, shipments remained firm because our company focuses primarily on producing and selling separators for high-end automotive batteries, and sales to automotive applications increased 43.6% year on year to ¥10,341 million.」

「Although the automotive battery market continued to grow, EV unit sales growth slowed and demand for automotive batteries declined due to revisions to subsidy policies in Europe and China. Battery manufacturers also reduced production amid the impact of global inventory adjustments on demand for consumer batteries. Under these conditions, our automotive separators are primarily used in high-end applications. Although sales volumes fell short of the initial outlook, they increased, and sales to automotive battery applications rose 130.9% year on year to ¥29,766 million.」

「In the lithium-ion secondary battery separator business, our Group's core business, shipments for consumer applications remained sluggish amid weak global demand for certain consumer products. Sales to consumer applications fell 26.4% year on year to ¥12,675 million. Although demand growth across the EV market was also slowing, demand for high-end vehicle models from our customers remained firm, supported by environmental policies in various countries. As a result, sales to automotive applications increased 67.6% year on year to ¥22,356 million.」

「Sales to consumer applications fell 26.4% year on year to ¥8,446 million. Sales to automotive applications, however, increased 67.6% year on year to ¥14,598 million, supported by environmental policies in various countries and firm demand from battery manufacturers for EV applications.」

「In the lithium-ion secondary battery separator business, our Group's core business, shipments for consumer applications stagnated due to inventory adjustments for certain products, resulting in sales to consumer applications of ¥4,322 million, down 12.1% year on year. Sales to automotive applications, however, increased 81.0% year on year to ¥7,201 million, supported by environmental policies in various countries.」

「As a result, sales to automotive battery applications were ¥22,741 million, up 49.7% year on year. Demand for high-end batteries for power tools, cordless household appliances and e-bikes in consumer applications also continued to increase steadily, with sales to consumer battery applications of ¥22,359 million, up 51.4% year on year.」

「As a result, sales to automotive battery applications were ¥15,447 million, up 41.5% year on year. Demand for high-end batteries for power tools, cordless household appliances and e-bikes in consumer applications remained stable, with sales of ¥16,996 million, up 80.3% year on year.」

「Sales volumes were approximately 10% above the plan at the beginning of the fiscal year. As a result, sales to automotive battery applications were ¥8,710 million, up 29.3% year on year. In consumer applications, demand for high-end batteries for e-bikes, in addition to power tools and cordless household appliances, increased substantially, resulting in sales of ¥11,487 million, up 92.9% year on year.」

「In the lithium-ion secondary battery separator business, our Group's core business, the broad trend toward decarbonization remained unchanged despite these conditions. Demand continued to increase with the expansion of the European automotive battery market, while demand for high-specification batteries in consumer applications also increased steadily. As a result, sales volumes were broadly in line with the plan at the beginning of the fiscal year. Sales to automotive battery applications were ¥3,979 million, up 18.9% year on year, while sales to consumer battery applications were ¥4,920 million, up 79.5% year on year.」

「Of this, sales to automotive battery applications were ¥15,195 million, up 27.6% year on year. Demand for power tools and cordless household appliances also increased substantially in consumer applications, with sales of ¥14,770 million, up 124.6% year on year.」

「Sales volumes increased significantly for both major projects, products for European automotive batteries and products for high-end consumer batteries, and sales progressed broadly in line with the plan.」

「As a result, sales of products for automotive batteries amounted to ¥6,734 million, up 57.5% year on year. Demand for high-end consumer batteries also grew significantly, with sales reaching ¥5,953 million, up 125.2% year on year. These factors brought consolidated sales for the second quarter under review to ¥12,686 million, an increase of ¥5,766 million, or 83.3%, year on year.」

「As a result, sales of products for automotive batteries amounted to ¥3,346 million, up 7.9% year on year. Demand for high-end consumer batteries also increased significantly, with sales of separators for consumer batteries reaching ¥2,741 million, up 93.3% year on year.」

「In particular, sales of products for automotive batteries, the core product, gradually recovered from the third quarter to ¥11,905 million, an increase of ¥6,597 million, or 124.3%, year on year.」

「As a result, sales of products for automotive batteries gradually recovered during the third quarter to ¥7,352 million, an increase of ¥4,812 million, or 189.4%, year on year.」

「During the cumulative second quarter of the current consolidated fiscal year, the global economy continued to be affected by the spread of COVID-19, with production activity stagnating worldwide, followed by a gradual recovery by region and product. In China, sales began to recover after April as subsidy programs for the automotive industry were reinstated. In Europe, governments announced policies positioning EV production, particularly within the automotive industry, as a core post-pandemic industry, and sales also began to recover, supported by subsidy policies.」

「As a result, the automotive segment's share of sales expanded from approximately 63.7% in the fourth quarter of 2019 to approximately 68.6% in the first quarter under review.」

「As a result, the automotive segment's share of sales expanded from approximately 16% for full-year 2018 to approximately 41% for the full year under review. Sales increased sharply in December, bringing the segment back into the black for the month.」

「Although the automotive battery market has shown signs of stagnation as vehicle sales in China have struggled to grow and the government's EV subsidy program has ended, European automakers continue to actively announce new EV models at motor shows held in various countries, increasing their focus on EVs and driving growing expectations for higher demand for automotive batteries. In consumer applications, the energy storage systems market has begun to gain momentum as a new application, but demand for products exported from China to North America has yet to recover, affected by sluggish growth in the smartphone market and U.S.-China trade friction.」

「The lithium-ion secondary battery separator business, the Group's core business, was affected in consumer applications by stagnant exports of Chinese products to the United States, while EV sales growth in China's automotive market slowed following subsidy reductions. Meanwhile, European automakers have begun mass production of EVs smoothly, and stable mass production is expected to progress from the second half of this year onward.」

「In transportation equipment applications, including EVs (electric vehicles) and HEVs (hybrid vehicles), European and U.S. automakers have successively announced new EV models, leading to a sharp increase in mass-production supplies by major battery manufacturers.」

「Although growth in the smartphone market has stagnated in consumer applications, which account for more than 50% of the lithium-ion secondary battery market, the power-related battery market has continued to grow as power tools and household appliances have become cordless. In transportation equipment applications, including EVs (electric vehicles) and HEVs (hybrid vehicles), which had been driven by the Chinese market, growth slowed in China, but investment by European and U.S. automakers in EV manufacturing continued to expand, as did the production scale of major battery and battery materials manufacturers.」

「China's lithium-ion battery market, which has driven EV demand, continues to face unstable production by battery manufacturers due to changes in the subsidy system for automotive batteries and price fluctuations in certain major materials, and signs of a slowdown remain. Meanwhile, production of high-end cylindrical batteries for power applications by major battery manufacturers in Japan and South Korea continues to grow steadily. In anticipation of medium-term growth in EV demand led by European automakers, active capital investment continues by lithium-ion battery manufacturers and major materials manufacturers in Japan, China, South Korea and other countries.」

「Battery manufacturers in South Korea and Japan have gradually begun supplying batteries to OEMs for EVs in Europe and the United States, where demand is expected to gather momentum from the second half of 2019, and each company continues to expand production capacity. In the consumer battery market, although smartphone demand has not shown significant growth, demand for high-end cylindrical batteries for power tools and the cordless home appliance market continues to expand.」

「Against this backdrop, the lithium-ion battery market continued to expand, driven by growth in automotive applications in China. Although growth in mobile device applications has shown signs of stagnation in consumer applications, power-related cylindrical batteries and pouch-type batteries for IT applications have continued to expand steadily. During the cumulative first quarter of the current consolidated fiscal year, seasonal factors reduced the share of the Group's sales from automotive applications in China, bringing automotive applications to approximately 25%. Meanwhile, strong growth in demand from major customers in other regions for power-related cylindrical batteries increased the share of sales to consumer applications to approximately 75%.」

「Consumer applications account for approximately 65% of the Group's sales. Within consumer applications, power-related batteries for power tools and smartphone applications are the major markets. Automotive applications account for approximately 35%; although battery manufacturers temporarily experienced lower productivity following changes to the Chinese government's subsidy policy, operations have largely recovered.」

「At present, consumer applications, which account for just under 60% of the overall market, continue to see steady growth in smartphone battery and power-related applications. Although EV-related applications, where rapid growth is expected, remain heavily dependent on the Chinese market, they already account for more than 40% of the market, and further significant expansion, including in Europe and the United States, is expected. China's automotive market began to recover from a low in the first quarter of this year, with eco-friendly vehicle sales reaching 420,000 units in the cumulative first three quarters, up 40% year on year, and demand is expected to continue recovering in the fourth quarter.」

「In consumer applications, which account for 60% of the overall market, smartphone batteries and power-related applications are driving the market. EV-related applications, where growth is accelerating, have expanded to approximately 40% of the market, and the current period has been one of preparation for a sharp increase in demand in the European and U.S. markets from next year onward.」

「In consumer applications, which account for 60% of the overall market, sales volume has grown steadily by approximately 10% annually, driven by larger smartphone battery capacities and the increase in applications for power-related uses. Applications related to electric vehicles (EVs), where growth is accelerating, have expanded to approximately 40% of the market.」

「Although the consumer applications market, which accounts for approximately 70% of the lithium-ion secondary battery market, is becoming increasingly mature, growth continued as battery capacities expanded, existing applications such as smartphones remained solid, and new applications such as power tools expanded. In transportation equipment applications, including EVs (electric vehicles) and HEVs (hybrid vehicles), which represent a new market for lithium-ion secondary batteries, the market continued to expand steadily.」

「In consumer applications, which account for 70% of the overall market, sales volume has grown at an annual rate of at least 10%, driven by the expansion of applications and larger battery capacities. Sales volume in transportation equipment applications, which account for 30%, has shown significant growth of more than 30% annually.」

「In consumer applications, which account for 70% of the overall market, sales volume has grown steadily by approximately 10% annually, driven by larger battery capacities and other factors. Sales volume in transportation equipment applications, which account for 30%, has shown significant growth of more than 30% annually.」