Panasonic Energy, a battery unit of Japanese Panasonic Holdings, will spend $4bn to build a new battery plant in Kansas to boost lithium-ion battery production in the US, the company announced in a statement on July 13. 

The Japanese group, the world’s third-largest electric vehicle (EV) batteries producer following Chinese CATL and South Korean LG Energy solution, is Tesla’s battery supplier and a partner of a joint battery venture, Prime Planet Energy & Solutions, with Toyota. 

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“With the increased electrification of the automotive market, expanding battery production in the US is critical to help meet demand,” Kazuo Tadanobu, president and CEO of Panasonic Energy, said in the statement. 

The US is receiving unprecedented investment in the EV battery industry. According to fDi Markets, the US has received the largest amount of investment in EV battery manufacturing among other global competitors between January 2017 and May 2022, with $17bn of announcement, followed by Germany ($13bn) and China ($6bn). The country received a record high investment in the EV battery manufacturing industry in 2022 between January and May, worth around $8.9bn, which is more than twice that of 2021 ($3.8bn).  

The announcement comes five years after Panasonic began lithium-ion battery production with Tesla in the US state of Nevada. The company said its current US battery manufacturing operation has shipped more than six billion EV battery cells, and the new Kansas facility will support its US production. The construction of the facility will start later this year and take a couple of years to be operational, according to a Kansas Department of Commerce spokesperson.

Panasonic said the new facility will create 4000 direct jobs, but the Kansas Department of Commerce expected the investment could add up to 4000 jobs created by suppliers and 16,500 construction jobs, according to its statement on June 13. Kansas governor Laura Kelly pushed an incentive programme to attract megaprojects worth more than $1bn earlier this year. In the specific case of Panasonic, the Kansas Department of Commerce said the incentive package is estimated at $829m and will be provided on a reimbursement basis after the company has made investments and hired employees. 

“When the Kansas Legislature passed the Apex legislation, this was the kind of megaproject we had in mind,” said Ron Ryckman, speaker of the Kansas House of Representatives in the Kansas Department of Commerce statement.

This $4bn EV battery plant represents “the largest private investment in Kansas, and one of the largest EV battery manufacturing plants of its kind in the country,” said Ms Kelly in the statement published by Kansas Department of Commerce on July 13. 

Although Panasonic said the additional details will be shared as the project progresses, it did not comment on when the plant will be operational. 

The company is developing the advanced EV battery called 4680, which was pioneered by Tesla, and plans to commercialise it from fiscal year 2024. The new battery in development has five times more energy capacity than current devices. 

It expects to expand its EV battery production capacity by several times, with most of the increase in North America by fiscal 2029, according to Panasonic Energy’s press release for its group international relations day on June 1.