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Panasonic needs four more EV battery plants, executive says
Global Banking & Finance Review®
Company
By Miho Uranaka
OSAKA, Japan (Reuters) -The battery arm of Japan’s Panasonic will need to build four more factories to reach its target for a sharp boost in annual capacity of batteries for electric vehicles by 2031, its technology chief told Reuters.
The comments by Shoichiro Watanabe of Panasonic Energy are the Tesla supplier’s first clear indication of the number of additional factories it will need.
They could also fuel expectations of more investment by Japanese companies in the United States, after a deal the two countries struck in March key to widening access for Japanese manufacturers to U.S. electric-vehicle (EV) tax credits.
In May, Panasonic Energy said it aimed to boost annual EV capacity to 200 gigawatt hours (GWh) by early 2031, or about four times its capacity in March this year.
With a plant in Nevada, it is building a second in Kansas that is expected to take annual capacity to 80 GWh once operational, it has said.
“We will need to build around another four factories,” Watanabe, the company’s chief technology officer, said in an interview at its headquarters in Osaka on Friday.
But he stopped short of mentioning specific locations, time frames or investment sizes.
He signalled an openness to potential joint ventures for EV battery production, with automaker Mazda Motor among others, citing the changing nature of such projects in which investment is no longer shouldered by battery makers alone.
“The style where battery producers will make all investments is disappearing,” he said, adding that the 200 GWh capacity was the minimum necessary to be a major player.
Panasonic has said it is focusing on North America to build up capacity for production of 4680 batteries, the newest cells championed by Tesla’s chief executive, Elon Musk.
Previously it said it planned to build at least two new factories for 4680 production in North America by 2030. Oklahoma has been seen as a possible site.
The four new plants will need to be supported by about a dozen factories of materials suppliers, Watanabe said, in a battery supply chain built around the principle of “local production for local consumption”.
Joint procurement with major customers could also be considered, he said, taking into account tax breaks under the U.S. Inflation Reduction Act (IRA) and the need to limit the carbon footprint.
Given the size of investment required, makers of materials used in the batteries will also need to make decisions about their plans as early as possible, he said.
Panasonic will not rule out the possibility of a joint battery venture with Mazda as part of a supply partnership the companies are working out, Watanabe said.
Last month the firms said they would hold talks on setting up a partnership to supply Mazda with cylindrical lithium-ion batteries made in Japan and North America.
They aim to sign off on it this year, and expect to supply batteries after 2025.
(Reporting by Miho Uranka; Writing by Daniel Leussink; Editing by David Dolan)
EV battery production refers to the manufacturing of batteries specifically designed for electric vehicles, which are essential for powering these vehicles.
A joint venture is a business arrangement where two or more parties agree to pool their resources for a specific project, sharing profits and risks.
Battery capacity refers to the amount of energy a battery can store, typically measured in kilowatt-hours (kWh) or gigawatt-hours (GWh), influencing the range of electric vehicles.
Local production for local consumption is a principle where goods are produced close to where they are consumed, reducing transportation costs and environmental impact.
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