Japan's Panasonic Holdings Corp said on Monday it will start building a new battery plant in Kansas in November and aims to begin mass production by March 2025, targeting North America's fast-growing market for electric vehicles.
The conglomerate's energy unit, which supplies batteries to Tesla Inc, said in July it had picked Kansas as the site for a new plant to supply batteries primarily to Tesla, joining other battery suppliers planning massive U.S. investments to qualify for new EV tax credit rules and to meet potentially massive demand there.
Panasonic said in a statement that it expects initial production capacity of 30 gigawatt hours.
Kansas state officials said in July the new factory would create up to 4,000 jobs with investment of up to $4 billion, pending final approval by Panasonic's board.
"As the global shift to EVs accelerates, we are looking into ways to strengthen our battery production capacity in North America and meet the growing demand from our automotive partners," said Kazuo Tadanobu, president of Panasonic Energy Co, in the statement.
The company said the factory would produce its 2170 model lithium-ion battery cells for electric vehicles.
The conglomerate also lowered its full-year operating profit forecast to 320 billion yen ($2.16 billion) from 360 billion yen for the year ending March 31. That compares with a 349.9 billion yen average forecast by 19 analysts.
Panasonic posted an 11% drop in second-quarter operating profit, but performed better than analysts' estimates.
It reported 86.1 billion yen ($582.54 million) in operating profit for the three months to end-September, versus an average 81.6 billion yen profit estimated by nine analysts, according to Refinitiv data. A year earlier, the company earned 96.8 billion yen.
Although sales rose at its energy business, operating profit fell due to rising prices for raw materials and logistics, as well as increased development expenses and fixed costs as it increased production.
Its rivals, China's CATL and South Korea's Energy Solution, posted strong battery profit growth after they passed some of their cost increases to clients.
While known for consumer electronics and appliances, Panasonic has in recent years focused on building parts and supplying services to other businesses, including batteries for Tesla's electric cars.
Panasonic has said that, by 2029, it plans to expand its battery production capacity by three to four times, with most of the increase in North America.
It is working to supply Tesla with a larger battery known as the 4680 model, starting with production in Japan in its next fiscal year.
Source: Reuters
Image source: Reuters
