Japan’s Panasonic Holdings said on Monday it will begin construction of a new battery plant in Kansas, U.S., in November and plans to start mass production by March 2025, targeting the fast-growing electric vehicle market in North America, Reuters reported.
Panasonic Group’s energy unit, which supplies batteries to Tesla Inc., said in July it had chosen Kansas as the site for the new plant to supply batteries primarily to Tesla, joining other battery suppliers planning large investments in the U.S. to comply with new tax credit rules for electric vehicles and to meet potentially large local demand.
Panasonic said in a statement that initial production capacity is expected to be 30 gigawatt hours.
Kansas officials said in July that the new plant would create up to 4,000 jobs and represent an investment of up to $4 billion (about 29.08 billion yuan), pending final approval by Panasonic’s board of directors.
Kazuo Tadanobu, president of Panasonic Energy, said in a statement, “As the global shift to electric vehicles accelerates, we are looking at ways to strengthen our battery production capacity in North America and meet the growing demand from our automotive partners.”
The company said the plant will produce its 2170 model of lithium-ion battery cells for electric vehicles.
The conglomerate also lowered its operating profit forecast for the year ending March 31 to 320 billion yen (about 17.744 billion yuan) from 360 billion yen (about 17.712 billion yuan). This compares with an average forecast of 349.9 billion yen (17.215 billion yuan) from 19 analysts.
Panasonic reported an 11 percent drop in second-quarter operating profit, but performed better than analysts’ expectations.
The company posted an operating profit of 86.1 billion yen ($4.236 billion) in the three months to the end of September, according to Refinitiv, compared with the average profit of 81.6 billion yen ($4.015 billion) forecast by nine analysts. A year ago, the company earned 96.8 billion yen (about 4.763 billion yuan).
Despite sales growth in its energy business, operating profit declined due to higher raw material and logistics prices, as well as higher development expenses and fixed costs as its production volume increased.
Its competitors CATL and Korea Energy Solution posted strong battery profit growth after passing on some of their cost increases to customers.
Although known for its consumer electronics and appliances, Panasonic has focused in recent years on making components and providing services for other companies, including batteries for Tesla electric cars.
Panasonic said it plans to triple to quadruple its battery production capacity by 2029, with most of the increase in North America.
Panasonic is working to provide Tesla with a larger battery for the 4680 model, which will begin production in Japan in the next fiscal year.
