Japanese company Panasonic Holdings Corp said it will start building a new battery plant in Kansas in November and aims to mass production by March 2025, targeting North America’s fast-growing electric vehicle market.
The company’s energy unit, which supplies batteries to Tesla Inc, has chosen Kansas as the site for a new plant that will supply batteries primarily to Tesla, joining other battery suppliers planning significant U.S. investments to comply with new electric vehicle tax credit rules and to meet the potentially massive demand there.
According to Panasonic, the initial production capacity will be 30 gigawatt-hours.
Kansas civil servants said in July that the new factory would provide up to 4000 jobs with an investment of up to $4 billion, which has yet to be approved by Panasonic’s board of directors.
Panasonic Energy Co-president Kazuo Tadanobu said that amid the global transition to electric vehicles, they are looking for ways to increase battery production in North America and meet growing demand.
The company plans to produce 2170 lithium-ion batteries for electric vehicles at this plant.
The company’s full-year operating profit guidance is also lower to 320 billion yen ($2.16 billion) from 360 billion yen for the year ended March 31.
Panasonic announced data on the fall in operating profit in the second quarter by 11%, but nevertheless, the results were better than analysts’ forecasts.
Panasonic reported an operating income of 86.1 billion yen ($582.54 million) in the three months to the end of September, compared to an average profit of 81.6 billion yen estimated by nine analysts. The company earned 96.8 billion yen a year earlier.
Although sales in the energy sector rose, operating profit declined due to raw material and logistics prices, as well as increasing development costs and fixed costs during the expansion of production.
In the international market, China’s CATL and South Korea‘s Energy Solution have seen good growth in battery profits after they passed on some of their cost increases to customers.
Panasonic, known for its consumer electronics and appliances, has recently been focusing on manufacturing parts and providing services to other businesses, including batteries for Tesla electric vehicles.
The company plans to triple or quadruple its battery production by 2029, with much of that growth coming from North America.
The company is working to supply Tesla with a larger battery, known as the Model 4680, which will begin production in Japan next fiscal year.
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