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Panasonic’s Group CEO Yuki Kusumi emphasized the need to focus on productivity in the company’s battery business, hinting at a possible delay in building a third battery plant in North America. The move comes as demand for electric vehicles (EVs) experiences a cooling trend.
Decision Timing in Flux:
Panasonic Energy, the battery unit, had initially aimed to decide on constructing a new factory by the end of March. However, Kusumi stated in a recent interview that the decision would be made “when the timing is right,” highlighting the importance of thoroughly increasing productivity before expanding further.
Kusumi stressed the necessity of enhancing productivity before considering establishing a third location. He mentioned the importance of careful consideration and thorough planning to ensure the efficiency of the battery unit.
Existing Investments and Production Capacity:
Panasonic Energy currently operates a plant in Nevada and is constructing a second one in Kansas.
Kusumi instructed the energy unit to prioritize boosting production volume from existing investments over deciding on the location for a third plant.
The Kansas plant is expected to increase annual auto battery capacity to 80 gigawatt hours (GWh) with plans to reach 200 GWh by early 2031.
Market Dynamics and Cooling EV Demand:
The cautious approach comes amid signs of cooling demand for EVs in the United States, prompting automakers like General Motors and Ford to scale back production plans.
While consumer demand for EVs is growing globally, key markets such as the United States and Europe have experienced a slowdown, partly due to higher interest rates affecting affordability.
While the demand for EVs is growing, profitability has not met industry expectations. Kusumi acknowledged that Panasonic wanted the energy unit to improve its manufacturing processes, aiming to generate profits without relying solely on incentives like the U.S. Inflation Reduction Act.
Raising Production Capacity through Process Improvements:
Kusumi highlighted the potential to raise production capacity by optimizing processes such as machine maintenance. He emphasized the company’s commitment to adapting to changing circumstances and improving efficiency in the dynamic EV market.
Panasonic aims to reduce its reliance on legislative incentives, such as the U.S. Inflation Reduction Act, which has driven investments in new EV battery plants in the United States.
Kusumi’s strategy focuses on making the energy unit financially sustainable without solely depending on external regulatory support.
