Panasonic to Build Four More EV Battery Factories by 2031
Panasonic Energy, the battery arm of Japan's Panasonic, intends to construct additional factories to achieve a substantial increase in annual battery capacity for electric vehicles by 2031.
Panasonic Energy, a key supplier to Tesla, has revealed its intention to build four more factories to meet its ambitious target for expanding battery capacity for electric vehicles (EVs) by 2031. The announcement by Shoichiro Watanabe, Panasonic Energy's technology chief, marks the first clear indication of the number of factories required to fulfill the company's goals.
This development is expected to encourage further investment by Japanese companies in the United States, following a bilateral agreement in March that facilitates Japanese manufacturers' access to U.S. EV tax credits. In alignment with their objectives, Panasonic Energy aims to boost its annual EV capacity to 200 gigawatt hours (GWh) by early 2031, an impressive four-fold increase compared to its capacity in March of this year.
Currently, with one plant in Nevada and a second one under construction in Kansas, the company anticipates achieving an annual capacity of 80 GWh once the Kansas plant becomes operational.
During an interview at Panasonic's headquarters in Osaka, Watanabe mentioned the necessity of building approximately four additional factories to reach their goals. However, he refrained from disclosing specific locations, timeframes, or investment sizes.
Watanabe also highlighted the potential for joint ventures in EV battery production, citing Mazda Motor as one of the potential partners. He acknowledged the evolving landscape of such projects, emphasizing that battery makers are no longer solely responsible for investment. In addition, Watanabe stressed that achieving a minimum capacity of 200 GWh is crucial to establish Panasonic as a major player in the industry.
Panasonic has already expressed its focus on North America for expanding capacity to produce 4680 batteries, the latest cells advocated by Tesla's CEO, Elon Musk. The company previously announced plans to construct at least two new factories in North America for 4680 battery production by 2030, with Oklahoma being considered as a potential location.
Furthermore, Watanabe emphasized that the successful establishment of the four new plants would require support from around a dozen materials suppliers, following the principle of "local production for local consumption" in the battery supply chain.
To optimize the process, joint procurement with major customers and consideration of tax breaks under the U.S. Inflation Reduction Act (IRA) will be explored, along with a focus on limiting the carbon footprint. Watanabe stressed the importance of materials suppliers making timely decisions due to the substantial investment required.
Moreover, Panasonic remains open to the possibility of a joint battery venture with Mazda as part of an ongoing supply partnership. The companies are currently in talks to establish a collaborative agreement to supply Mazda with cylindrical lithium-ion batteries manufactured in Japan and North America. The partnership is expected to be finalized this year, with battery supply projected to commence after 2025.
Panasonic Energy plans to build four additional factories to achieve its target for increasing annual electric vehicle battery capacity by 2031.
The announcement by Panasonic's technology chief, Shoichiro Watanabe, is the first indication of the number of factories required.
This move is likely to encourage more Japanese investment in the United States, following a bilateral agreement granting access to U.S. EV tax credits.