Panasonic reportedly delays production ramp at US battery factory due to low Tesla demand

Panasonic has reportedly delayed its plan to ramp up production at its new battery factory in Kansas due to low demand from Tesla, its primary customer.

Since 2022, Panasonic has planned to build a new battery cell factory in Kansas.

The Japanese manufacturer had become a major player in batteries for electric vehicles through its partnership with Tesla to build batteries at Gigafactory Nevada.

It has since gained a few other customers, but Tesla remains its number one customer for EV battery cells, and it is expected to be the primary customer of battery cells coming from the new Kansas plant.

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However, we now learn that Panasonic is delaying its plans for the factory.

Nikkei reports that Panasonic is delaying its plan to ramp up to full production by March 2027 due to expected lower demand from customers:

Tesla supplier Panasonic Holdings has backpedaled on its internal goal for electric vehicle battery production at a U.S. factory in the state of Kansas, Nikkei has learned. While the Japanese electronics giant was initially aiming for full production of an annual 30 gigawatt-hours by the end of March 2027, it will postpone the target date.

Production is expected to start soon with an official ribbon-cutting set for next week.

The plan was to produce 30 GWh of 2170 battery cells, Tesla’s primary battery format, but it’s now unclear when Panasonic plans to ramp up to that production capacity amid expected demand slump for EVs in the US with the removal of the tax credit starting in Q4 2025.

Electrek’s Take

Panasonic has done well by supplying Tesla. It was the first battery manufacturer to give Tesla a chance back in the day, and it propelled the company into a major EV battery manufacturer.

However, it’s now backfiring somewhat, as Tesla’s demand has slowed significantly.

Among Tesla’s large markets, the US remains its healthiest, with sales declining in Europe and China. However, it is expected to decrease further without the tax credit, starting in Q4.

Tesla could get a significant hit, and Panasonic would need to find other buyers for its batteries coming out of Kansas.

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