Panasonic Holdings has scrapped its timeline to reach full production capacity at a new Kansas battery plant, according to Nikkei, reflecting broader challenges facing electric vehicle suppliers as demand cools.
The Japanese electronics giant originally targeted 30 gigawatt-hours of annual output by March 2027 at its De Soto facility, according to people familiar with the matter. The company has now postponed that goal without offering a revised schedule, raising questions about the $4 billion project’s viability.
The delay comes as Tesla, Panasonic’s primary customer, reported a 13.5% decline in global sales during the second quarter, marking consecutive quarters of double-digit drops. Industry analysts predict Tesla’s U.S. sales could fall 10-12% following the elimination of the $7,500 federal EV tax credit later this year.
Panasonic plans to begin limited production soon, with an official opening ceremony scheduled for next week. The facility will initially manufacture 2170 cylindrical batteries for Tesla’s Model 3 and Model Y vehicles.
The production setback underscores growing uncertainty in the U.S. EV market, where overall sales growth slowed to just 10% in 2024 compared to 40% the previous year. Panasonic’s cautious approach contrasts sharply with earlier projections that positioned the Kansas plant as central to meeting surging domestic battery demand.
The company’s shares have declined as investors reassess EV supply chain investments.
