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Panasonic Considers Expanding Kansas Battery Plant Amid EV Market Uncertainties

Despite slowing EV sales, Panasonic mulls significant expansion in U.S. to meet Tesla's growing battery demand
p 6752.TSE Blue Chip 150 Tech 350
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According to Nikkei, Panasonic Energy, a key Tesla battery supplier, is contemplating further investment in Kansas, expanding its production capabilities despite the electric vehicle (EV) market’s apparent slowdown. The Japanese firm is deliberating over a new phase—dubbed internally as “Phase 3″—which could mirror the scale of its existing $4 billion De Soto facility. This expansion is poised to bolster its provision of advanced 4680 batteries, known for their quintuple energy capacity compared to older models, thereby enhancing EV production efficiency.

The initiative aligns with Panasonic’s strategy to amplify its footprint in the EV battery domain, especially in North America, anticipating a quadruple increase in its production capacity by 2031. Despite a dip in EV sales growth and rising operational costs at its De Soto plant, the company’s unwavering commitment reflects a robust demand forecast, primarily driven by Tesla’s ongoing need for innovative battery solutions. Tesla’s push for newer models, including the Cybertruck and Roadster, underscores the urgency of this expansion.

Panasonic’s contemplation period is set to conclude by year-end, with decisions heavily influenced by the 4680 battery’s production viability, currently under evaluation in Japan. This strategic move is crucial for maintaining Panasonic’s competitive edge in the high-stakes EV battery market, where technological leadership and safety are paramount.

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