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Panasonic eyes productivity boost before third battery plant in North America

Panasonic's Lithium-ion EV battery plant in Dalian, China. Image: Panasonic

Panasonic might put its third battery plant in North America on hold and focus on boosting productivity instead, Group CEO Yuki Kusumi said in an interview.

"I keep telling people we need to think about thoroughly raising productivity before setting up a third location," Kusumi said in Tokyo, adding that a decision on the location would be made only "when the timing is right".

Kusumi comments come amid signs that US demand for EVs is cooling, with automakers such as General Motors and Ford scaling back plans: Last year, GM deferred the opening of a $4 billion e-truck plant in Michigan by a year, while Ford told suppliers it was halving production of its F-150 Lightning pickup truck as demand lagged expectations.

Panasonic Energy, the Japanese group's battery unit, has one battery plant in Nevada and broken ground on a second plant in Kansas at an investment of $4 billion, which will manufacture '2170' cylindrical Li-ion batteries by 2025. 

The company expects the Kansas plant to boost its annual EV battery capacity to 80 GWh a year, which it aims to further increase to 200 GWh by 2031. In December, the unit announced that Oklahoma, which was being explored for a third plant, was no longer in the running. The company also has battery plants in China and Japan.

Panasonic Energy has been told to prioritize increasing output from existing investments before moving ahead on a new plant, Kusumi said, adding that the unit had room to increase production by improving it processes such as machine maintenance and by reducing the time lags that occur following changes in business circumstances.

Panasonic top management wants the energy unit to improve its manufacturing so that it can generate profits without relying on subsidies and incentives from the US Inflation Reduction Act. Kusumi also said it was preferable to have fewer production sites, given the staff requirements of a new plant. 

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