Panasonic Energy’s battery unit had previously set a goal to finalize the decision on constructing the factory by March-end.
According to Panasonic’s Group CEO Yuki Kusumi, the focus for Panasonic’s battery business must be on enhancing productivity, indicating a potential delay in the construction of a third battery plant in North America due to a slowdown in electric vehicle (EV) demand. The battery unit, Panasonic Energy, initially aimed to decide on building the factory by the end of March. However, Kusumi emphasized that the decision would be made “when the timing is right,” emphasizing the need to thoroughly improve productivity before expanding to a third location.
Kusumi’s main directive to the energy unit is to prioritize increasing production volume from existing investments rather than immediately selecting the site for the third plant. He highlighted the preference for fewer production sites, considering the human resources requirements of a new facility. The comments from Kusumi coincide with a trend of decreasing demand for EVs in the United States, leading automakers like General Motors and Ford to scale back production plans.
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Panasonic Energy currently operates a plant in Nevada and has initiated construction on a second one in Kansas. The previously considered site in Oklahoma is no longer under consideration. The Kansas plant is expected to increase the annual auto battery capacity to 80 gigawatt hours (GWh) a year, with a goal of reaching 200 GWh by early 2031.
Kusumi stressed the importance of improving manufacturing processes, such as machine maintenance, to enhance production capacity without immediately requiring a new plant. While global demand for EVs is growing, it has cooled in key markets like the United States and Europe. Kusumi acknowledged the challenges, citing higher interest rates affecting consumer affordability and a shift towards waiting for cheaper models in development.
Panasonic aims to make the energy unit profitable without relying on incentives like the U.S. Inflation Reduction Act (IRA), which has led to increased investments in new EV battery plants. The IRA, along with other U.S. legislation, offers incentives to promote domestic production of EVs, batteries, and raw materials.