[Complete Battery Guide]④ Where Did All Those 'EneLoop' Rechargeable Batteries Go?… The Rise and Fall of Japanese Battery Companies

Sanyo Leads Market Share with Nickel-Metal Hydride and Lithium-Ion Battery Success
Forced Business Expansion, Earthquake, and Losses Lead to Sale to Panasonic
Sony Sold to Murata Manufacturing After Repeated Fires and Large-Scale Recalls

Editor's NoteWe are now in the battery era. Batteries are found in almost every device, including mobile phones, laptops, and electric vehicles. [Complete Battery Mastery] is a section created to easily convey the basics of batteries, their ecosystem, company information, industry trends, and outlook to general readers, students, and investors interested in the battery industry and related companies. It is published every Saturday. After the series, it will be published as a book.

Sony succeeded in commercializing the world's first lithium-ion battery in 1991, but Sony was not originally a leader in the battery field. Sony entered the battery business later to achieve vertical integration of electronic products. At that time, the commonly used secondary batteries were nickel-cadmium (Ni-Cd) and nickel-metal hydride (Ni-MH) batteries. Sony focused on lithium-ion battery research to differentiate from existing products and ultimately succeeded.

Japan, where the small electronic device industry developed, was also ahead in the battery field early on. Among them, the company that stood out the most was Sanyo. Sanyo began to make its presence known by commercializing the nickel-metal hydride secondary battery for the first time in 1990.

Since the 1980s, there has been a strong trend toward smaller and lighter electronic products. As portable cassette players, portable CD players, and digital camcorders became widespread, demand for high-performance and long-lasting secondary batteries increased. To meet this demand, nickel-cadmium batteries were initially widespread, but after the 1990s, nickel-metal hydride batteries appeared and narrowed their position.

Nickel-metal hydride batteries consist of nickel hydroxide at the cathode, metal hydride compounds at the anode, electrolyte, and separator. Nickel-metal hydride batteries have the same voltage as nickel-cadmium batteries at 1.2 volts, but their capacity per volume (energy density) is about 1.5 to 2 times higher, and their charging speed is faster. They also do not use harmful substances that were problematic in nickel-cadmium batteries. These advantages highlighted nickel-metal hydride batteries as a replacement for nickel-cadmium in the secondary battery market. Even after Sony first commercialized lithium-ion batteries, nickel-metal hydride batteries remained dominant in the market. Sanyo's nickel-metal hydride battery brand 'eneloop,' launched in 2005, was released worldwide and gained great popularity.

The "Eneloop" nickel-metal hydride battery, launched by Sanyo in 2005, gained great popularity. The Eneloop brand has been maintained by Panasonic even after Sanyo was acquired and dissolved by Panasonic. Photo by Panasonic

Lithium-ion batteries had no memory effect, which was present in nickel-based secondary batteries, and had a longer cycle life. At that time, nickel-cadmium batteries had 300 to 400 charge-discharge cycles, nickel-metal hydride had 500 cycles, while lithium-ion batteries reached up to 1,200 cycles. However, lithium-ion batteries were expensive and had lower capacity per volume than nickel-metal hydride batteries, so their immediate market impact was limited. Lower capacity means shorter usage time per charge.

Sanyo solved this problem. Following Sony, Sanyo entered the lithium-ion battery market in 1994 and doubled the capacity by replacing the anode material from hard carbon to artificial graphite. Then, in 1996, Sanyo significantly lowered the price of lithium-ion batteries by applying inexpensive natural graphite to the anode. Subsequently, Toshiba further reduced lithium-ion battery prices in 1997 by developing low-cost electrolytic copper foil instead of rolled copper foil.

Lithium-ion batteries quickly dominated the secondary battery market because they were price-competitive with existing nickel-metal hydride batteries and superior in terms of lifespan and energy density. The mobile revolution, including the spread of laptops and mobile phones, provided a tailwind for lithium-ion battery adoption. Lithium-ion batteries gradually expanded their market beyond portable electronic devices to power tools and energy storage systems (ESS).

The Fall of the Giant Sanyo Electric

Japanese companies such as Sony, Sanyo, Matsushita (now Panasonic), Toshiba, and Hitachi rose to prominence, making the lithium-ion battery market almost exclusively Japanese from the 1990s through the 2000s, spanning nearly 20 years. Korean companies like LG Chem and Samsung SDI entered the secondary battery market from the mid-1990s but had little presence. By the late 1990s, Japanese companies supplied 90% of the world's lithium-ion batteries.

Sanyo, a traditional powerhouse in the battery market, stood out particularly. Although Sanyo entered the lithium-ion battery business later than Sony in 1994, aggressive facility investments allowed it to surpass Sony and become number one by 1999, just five years later. Its marketing strategy also paid off. Sanyo supplied batteries to Nokia, the second-ranked mobile phone company at the time, instead of Motorola, which was number one. This strategy greatly contributed to Sanyo's rise to the top of the lithium-ion battery market. As Nokia rose to number one in mobile phones, Sanyo's market share surged alongside.

In 2001, Sanyo acquired Toshiba's nickel-metal hydride battery division through a merger and acquisition (M&A), and in 2002, it also acquired GS Melcotech, which was ranked fifth in lithium-ion batteries, solidifying its number one position. In 2004, it even absorbed Toshiba's lithium-ion battery business.

However, overexpansion into areas from home appliances to semiconductors became a burden. Sanyo Electric suffered damage to its semiconductor plant due to a magnitude 6.8 earthquake in the Joetsu region of Niigata Prefecture in 2004. The fiscal year 2005 saw losses of 250 billion yen, and an accounting scandal also erupted. When the 2008 financial crisis hit, Sanyo could no longer endure and decided to sell the entire company to Matsushita. Matsushita's acquisition price for Sanyo was a staggering 660 billion yen, recognizing the intangible value of being the number one lithium-ion battery company.

At one point, Samsung Electronics of Korea was considered a candidate to acquire Sanyo Electric. Samsung and Sanyo had a close relationship, having established a joint venture called Samsung Sanyo Electric. However, the Japanese government preferred to find a new owner domestically rather than sell Sanyo to a foreign company, and ultimately Matsushita stepped in as the savior.

Panasonic's initially released batteries and lithium batteries, Sanyo's nickel-cadmium batteries. Photo by Panasonic

Originally, Sanyo Electric was a company separated from Matsushita Electric Industrial in 1947. Sanyo's founder, Toshio Iue, was the brother-in-law of Konosuke Matsushita, the founder of Matsushita Electric Industrial. In the end, Sanyo and Matsushita became one again.

Matsushita changed its name to Panasonic in 2009. Panasonic sold Sanyo's home appliance division to China's Haier in 2011 and completely dismantled Sanyo in 2013. Although the Sanyo battery brand disappeared into history, its technology remains within Panasonic. Panasonic has continued the reputation of Japanese batteries in the global market by successfully collaborating with Tesla electric vehicles.

Sony's battery business also faced difficulties. The laptop battery fire was a direct blow. In November 2005, a Dell laptop equipped with Sony's lithium-ion battery caught fire. Subsequently, fires caused by Sony batteries occurred in Japan and the United States. Investigations revealed that foreign substances had entered during the battery production process. The following year, laptops from Dell, Lenovo, Apple, and others equipped with Sony lithium-ion batteries were subject to a massive recall, totaling 8 million units. There were even allegations that Sony concealed the possibility of defects. The era of the 'electronic kingdom Sony' was over.

After the laptop fire incidents, Sony avoided investing in batteries for a while. Moreover, the strong yen situation unfolded in the 2010s. As a result, Sony's batteries began to lose price competitiveness against Korean companies like Samsung SDI and LG Chem in the global market. Seeking a breakthrough, Sony attempted to establish a battery joint venture with Nissan Motor in 2012, but this also failed.

Sony was unable to find a clear direction for its battery business. As the smartphone market exploded, Sony tried to expand its battery business again, but it was already too late. In 2015, Sony fell to fifth place in the global lithium-ion battery market. Competitors had already made large-scale investments and were far ahead. Eventually, in July 2016, Sony abruptly announced the sale of its battery division to Japan's Murata Manufacturing.

Murata Manufacturing, founded by Akira Murata in 1944, specialized in capacitors. It remains the world's number one in multilayer ceramic capacitors (MLCC). Murata wanted to expand its business into batteries by acquiring Sony's battery division. It also supplied batteries to Apple in the United States. However, Murata Manufacturing also had to downsize due to competition with Korean and Chinese companies. It is currently known to focus on research into next-generation batteries such as solid-state batteries.

Japanese Battery Technology Passed to China

When Toyota launched the hybrid vehicle Prius in 1997 and it gained great popularity, research on batteries for electric vehicles became active in Japan. Japanese companies also paid attention to electric vehicle batteries.

Japan's NEC formed a joint venture with automaker Nissan in 2007 to create Automotive Energy Supply Corporation (AESC), a lithium-ion battery company. Nissan invested 51%, and NEC 49%. Hitachi also entered the electric vehicle battery market by establishing Hitachi Vehicle Energy (later renamed Vehicle Energy Japan) in 2009.

AESC's batteries were installed in Nissan's Leaf, the world's first mass-produced pure electric vehicle, in 2010. Thanks to the Leaf's success, AESC rose to fifth place in the global electric vehicle battery market. In 2018, Nissan decided to sell AESC to China's Envision, judging that the company's growth was limited because its demand was restricted to Nissan only.

However, Nissan, having given up battery internalization, reacquired Hitachi's Vehicle Energy Japan in September 2022. This was during a period when the electric vehicle market was rapidly growing, centered on the United States and China. The Envision AESC that Nissan sold supplies batteries to Renault and BMW electric vehicles.

The technological development of lithium-ion batteries acted as a catalyst for accelerating the electric vehicle era. Along with this, electric vehicles caused another seismic shift in the global battery market.

A phenomenon in secondary batteries where the overall capacity decreases as charge and discharge cycles repeat. If recharging is repeated without fully discharging the battery, the storage capacity shrinks to the level before charging. It is called the memory effect because the battery seems to "remember" the limit of usable capacity.

Korea Electronics and Telecommunications Research Institute, Latest Secondary Battery Technology and Market Trends, 1999
LG Economic Research Institute, Sanyo's Transformation Strategy into an Energy Company, 2005
Korea Institute for International Economic Policy, 'Japan's Lithium-ion Secondary Battery Market and Technology Development Trends,' 2010
Nikkei, Sony Puts Plug on pioneering battery business, eyes Murata deal, 2016