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20 July 2022

Panasonic name De Soto, Kansas for next US battery plant

We have been waiting for Panasonic to unveil another giga factory lithium ion destination in the US for the past 12 months, and its deal this week is to build a plant in De Soto, Kansas, which is likely to be the base for building Tesla 4680 batteries in the US.

Six months ago it became clear that Panasonic would be the first company outside of Tesla to make the 4680, but much of the work would be based in Japan, where Panasonic has multiple factories in Wakayama, dedicated to different aspects of battery manufacture.

In our research paper on emerging Li-ion giga-factories we expected a new  factory to be announced this year to , begin manufacture by 2024, and get up to 24 GWh of output by 2025. It may well be possible that the factory will make batteries for other EV cars, not just Tesla.

This week it was simply announced that Panasonic’s next location would be in Kansas – with good road connections to both Nevada, where it already makes batteries, and Texas where Tesla is building another car factory.

This was another story that slipped out a day or so after we went to press last week with Kansas Governor, Laura Kelly announcing she has approved a $1 billion Apex (Attracting Powerful Economic Expansion) state incentive plan submitted by Panasonic Energy. The factory now has to have final Panasonic board approval and corporate funding agreed.

Panasonic Energy simply said that the plant would drive significant economic activity in Kansas and could create up to 4,000 new jobs with total investment being around $4 billion.

Governor Kelly said, “This project will be transformative for the Kansas economy, providing high-quality, high-tech jobs while bringing a new industry to the state that is forging a more sustainable future,” said Governor Laura Kelly. “This is a significant milestone for Kansas that is sure to drive economic growth and development.”

While the Panasonic CEO, said Kazuo Tadanobu made the oh so clear point that “With the increased electrification of the automotive market, expanding battery production in the US is critical to help meet demand.”

Rethink has calculated in its report on global giga factories, that the US will fall dramatically short of meeting customer demand in batteries for its electric vehicles. Every US car-maker – GM, Ford and Stellantis – has under-estimated the demand for new EV passenger vehicles, and consistently has had to reduce their internal combustion engine (ICE) supply chain while simultaneously increasing its EV lines. Now the issue of just where those batteries are going to come from haunts each of the big US manufactures. They do not wish to rely on a spot market and can only get full Joe Biden incentives if both the car and the batteries are built in the US with union labor.

Rethink Energy estimates that the US will fall short of making all the battery it needs by between 90 GWh and 100 GWh each year until manufacturing catches up in 2026/7. This is calculated purely with passenger vehicles, so once you add-on the batteries required for commercial electric vehicles, either US partners like Japan’s Panasonic have to meet the shortfall or batteries from China will have to become “acceptable” to US car-makers, or they will lose market share. Expect more US battery deals of this type to be announced over the next two years.

Yasuaki Takamoto, Executive Vice President of Panasonic Energy, Head of EV Battery Business said, “We appreciate Kansas’s dedication to sustainability and its commitment to and growth in the clean and renewable energy space.”

The announcement comes five years after Panasonic Group began production of lithium-ion batteries at Panasonic Energy of North America (PENA) in Sparks, Nevada. PENA is now one of the world’s largest lithium-ion battery factories, and has shipped six billion EV battery cells.