Panasonic Energy has announced plans to set up a battery manufacturing factory in Kansas to supply electric vehicle battery packs to Tesla and other automakers. The move comes as the automotive industry sees a gradual shift to electric cars and trucks amidst increasing gas prices and heightened environmental concerns. Panasonic is one of Tesla’s primary battery suppliers and a major investor in the automaker’s battery manufacturing facility at Sparks, Nevada.
Thanks to the increasing demand for EVs in the U.S. and worldwide, Tesla has been struggling to produce enough batteries in-house at its Nevada Gigafactory, resulting in reduced output and lost revenues. The Tesla CEO has already said that the shortage of batteries is the main obstacle to ramping up vehicle production. He also called on suppliers to increase battery production as part of Tesla’s plans to boost EV production in the coming years.
In a press release, Panasonic said that its planned battery facility would come up in De Soto, a suburb of the western fringes of Kansas City. While Tesla is expected to be one of the major beneficiaries of the upcoming facility, Panasonic also plans to supply to other EV-makers from the De Soto factory. However, the company didn’t specify which automakers it would supply from the De Soto plant once it’s operational. According to Reuters, Panasonic plans to expand its global battery production capacity by three to four times by the end of this decade, with most of the increase expected to come in North America as the market for EVs hots up even further in the coming years.
According to The Kansas City Star, the Panasonic factory will come up at a former ammunition plant in De Soto, but neither Panasonic nor Kansas officials have confirmed the report. According to Kansas governor Laura Kelly, the upcoming facility would see investments of up to $4 billion and could create up to 4,000 jobs once it is fully functional in a few years. However, in a statement to Reuters, Panasonic said that it is yet to make a definitive decision on some of the critical aspects of the new plant, including its production capacity, the total investment and the size of the workforce.
Panasonic is said to have picked Kansas as the location for the big battery manufacturing facility partly due to its proximity to Texas. Oklahoma was also considered a candidate location, but what eventually swung the deal in favor of Kansas was a favorable tax regime and incentives to the tune of nearly $1 billion. The proposed Panasonic plant would be one of the largest battery manufacturing facilities in the U.S. and, according to Governor Kelly, would be the “largest private investment in Kansas history.”