Billionaire Elon Musk, chief executive officer of Tesla Motors Inc., left, speaks as Jeffrey … [+]
As Tesla continues to diversify its suppliers, its chief U.S. source Panasonic is building a $4 billion electric vehicle battery factory in Kansas as a route toward competing in the increasingly competitive EV battery field and ease dependence on the EV pioneer.
The state of Kansas has approved Panasonic Energy, an EV battery unit of Panasonic Group, to establish the factory, subject to approval by the Japanese firm’s board of directors, according to a company statement. Panasonic Energy’s factory could create as many as 4,000 jobs at its proposed site in De Soto, a suburb in the Kansas City metropolitan area, the statement says.
The plant will be Panasonic’s second in the U.S., where it already runs a battery factory with billionaire Elon Musk’s Tesla near Reno, Nevada. U.S. assembly lines run today by Panasonic have already supplied more than 6 billion EV battery cells, most of them likely to Tesla.
But Tesla shows a trend toward “progressing diversification” of battery sources to stay “flexible” while developing different vehicle types, industry news website InsideEVs said in May.
“Panasonic has maintained its market share in the lithium-ion battery market almost exclusively through its relationship with Tesla,” says Christopher Robinson, research director with Lux Research. “As Tesla begins sourcing cells from suppliers other than Panasonic, it becomes crucial for Panasonic to find other consumers of batteries if it wants to maintain its market share.”
Osaka-based Panasonic Energy indicated it would see this factory as another portal to the world’s third-largest single-country plugin EV market after China and Germany.
“With the increased electrification of the automotive market, expanding battery production in the U.S. is critical to help meet demand,” Panasonic Energy’s president and CEO, Kazuo Tadanobu, said in the statement. “We aim to continue driving growth of the lithium-ion battery industry and accelerating towards a net-zero emissions future.”
Panasonic’s Kansas factory is likely to find plenty of clients given today’s EV demand, Robinson says.
“U.S. automakers are finding higher than expected demand for electric vehicles, leaving the supply of batteries as a limitation to faster growth,” he says. “Though no specific customers were announced, Panasonic should not have trouble finding demand for its batteries produced in Kansas.”
Global electric vehicle revenue of $105 billion last year will see compound annual growth of 19% through 2028 due to “environmental, societal and health objectives,” market analysis firm Vantage Market Research forecasts.
Panasonic Energy provides batteries for medical and consumer products as well. Its 104-year-old parent company Panasonic Corp. spins out a wide array of common consumer electronics. Corporate sales revenues come to $66 billion.