In a recent interview with Reuters, Panasonic’s Group CEO Yuki Kusumi emphasized the need for the company’s battery business to prioritize productivity enhancements. This strategic shift signals a potential delay in the construction of a third battery plant in North America, as the demand for electric vehicles (EVs) experiences a cooling trend.
The battery unit, known as Panasonic Energy, initially aimed to make a decision regarding the construction of a new factory by the end of March. However, Kusumi indicated that the decision would now be made “when the timing is right.”
Speaking from the company’s Tokyo office, Kusumi highlighted the importance of thoroughly increasing productivity before committing to a new location. This approach aligns with a broader industry trend, as automakers such as General Motors and Ford adjust their production plans in response to the changing dynamics of the EV market, particularly in the United States.
Panasonic Energy currently operates a plant in Nevada and has initiated the construction of a second facility in Kansas. A previously considered site in Oklahoma has been ruled out. The forthcoming Kansas plant is expected to elevate the annual auto battery capacity to 80 gigawatt hours (GWh) and has a long-term goal of reaching 200 GWh by early 2031.
Kusumi’s directive to the energy unit emphasizes prioritizing production volume from existing investments over deciding on the location of a third plant. He rationalized that having fewer production sites is generally more efficient, considering the human resources required for a new plant.
Recognizing the potential for increased production capacity, Kusumi outlined avenues for improvement, such as refining processes like machine maintenance. He acknowledged that time lags due to changing circumstances are inherent in any business but stressed the importance of optimizing existing capabilities.
While global consumer demand for EVs continues to grow, the United States and Europe have witnessed a cooling of interest, impacting profitability. Factors such as higher interest rates and the anticipation of more affordable EV models in development have contributed to this shift.
Kusumi expressed Panasonic’s goal for the energy unit to enhance its manufacturing processes, ensuring profitability without reliance on incentives like the U.S. Inflation Reduction Act. This legislation has driven investments in new EV battery plants by providing incentives to boost domestic production of EVs, batteries, and raw materials.
Panasonic’s strategic focus on productivity enhancement reflects a nuanced approach to navigating the evolving landscape of the EV market, ensuring long-term sustainability and profitability for its battery division.