Panasonic reduces production expectations for Kansas battery cell plant

Tesla supplier Panasonic is about to start production of 2170 round cells at its new US plant in Kansas, but is said to have revised its production targets. Insiders say the company has scrapped its long-standing goal of 30 GWh capacity per year by the end of March 2027, without yet offering a new outlook.

Panasonic had originally planned to increase local production capacity in Kansas to 30 GWh per year by spring 2027. Nikkei reports that the company is now pushing back this target date, stating that it is a “developing story”, and that more information is to come soon.

The reason given for the revision of battery cell production targets in the USA seem obvious: Panasonic’s main customer – Tesla – has famously seen falling sales figures, while the Trump administration is cutting all tax breaks, not only for the purchase of electric vehicles, but also for the surrounding charging and renewable energy infrastructure.

As construction on the Panasonic Kansas cell factory began in 2022, investing around 4 billion US dollars. Rumour had it at the time that Panasonic could also produce the new 4680 cells for Tesla there in the future. Pilot production had been underway in Japan, while series production was planned there from March 2023. According to earlier announcements by the company, production of the new cells was to be relocated to North America. Such a prospect is hardly likely now, in the current uncertain US industrial environment, but series production of 2170 round cells is set to start soon. Tesla uses the round cell format in some versions of the Model 3 and Model Y produced in the jointly operated Gigafactory 1 in Nevada.

There was also originally talk of a potential third plant in Oklahoma. In view of the curtailed planning for the recently completed production facility in Kansas, this project is likely to be on hold.

Overall, Panasonic recently rethought its roadmap. As early as mid-2024, the Group scrapped the timetable for expanding its global production capacities in light of weaker demand in North America. The previously communicated target of 200 GWh of battery cells per year for 2031 is no longer tied to the stated target year, as Nikkei reported just over a year ago, citing Panasonic CEO Kazuo Tadanobu. The target of 200 GWh worldwide is still being pursued, but with an uncertain target date.

Panasonic’s previously stated goals were to triple its global turnover to more than 3 trillion yen (19 billion US dollars) and quadruple its production capacity for electric car batteries to 200 gigawatt hours by the 2030 financial year, which ends in March 2031. The targets are now more modest. According to earlier media reports, Panasonic will focus less on the USA and more on Japan as a second pillar of growth to cushion the slump.

nikkei.com (paywall)