Panasonic Delays EV Battery Production Plans at Kansas Plant

According to Nikkei, Panasonic Holdings has adjusted its electric vehicle battery production plans at its factory in Kansas, USA. The company originally aimed to achieve an annual production capacity of 30 GWh by the end of March 2027, but has now decided to postpone this timeline. Panasonic has invested approximately $4 billion in the construction of the Kansas factory, which, once in mass production, will increase its total battery production capacity in the U.S. by 60%. Panasonic is a major supplier of electric vehicle batteries for Tesla, and this adjustment in production plans is attributed to sales difficulties faced by its largest customer, Tesla. Tesla is currently facing multiple challenges, including increased market competition, supply chain issues, and changes in consumer demand, all of which directly impact Panasonic's battery business planning. Due to its high dependence on Tesla, Panasonic's global electric vehicle battery installations dropped by 8.7% year-on-year to 9.4 GWh in the first four months of this year, with its market share remaining at just 3.0%. However, industry insiders indicate that with the upgrades of its 2170 and 4680 batteries, Panasonic's battery installations in the North American market are expected to rebound rapidly. Additionally, the U.S. government's cautious stance on substantial financial support for electric vehicle promotion poses challenges for the American electric vehicle industry. In response to recent U.S. tariffs on Chinese batteries and raw materials, Panasonic is adjusting its supply chain and increasing the proportion of localized production in North America. The company is also working to reduce its reliance on Chinese materials and ensure a stable battery supply chain through expanded local sourcing. These measures are expected to enhance its battery installations and supply stability in the North American market in the future. In May, Panasonic CEO Yuki Kusumi mentioned that its main customer (widely believed to be Tesla) is urging the company to accelerate the production schedule of its new Kansas factory. He noted that customers may believe that replacing Chinese batteries with Panasonic's U.S.-made batteries could help their electric vehicles sold in the U.S. qualify for significant consumer tax credits.