The Japanese company's CEO said Tesla battery supplier Panasonic is urging to accelerate the supply of its U.S.-made products to show that U.S. protectionist measures make batteries made by its Chinese competitors less competitive.
Yuki Kusumi said in an interview with foreign media in Tokyo that its main customers, widely believed to be Tesla, are encouraging its new Kansas factories to produce faster, most likely because Chinese batteries have lowered profits due to the combination of subsidies and tariffs, bringing them to the United States.
“We are eager to do this as we were told by customers to get Kansas to move quickly,” Kusumi said. He speculated that customers believed replacing Chinese batteries with US-made Panasonic would help its electric vehicles sold in the US qualify for a large consumer tax credit.
Under construction since 2022, and close to first production, Panasonic's plant in Desotho, Kansas will be the second battery site in the U.S. and will increase its output by 60% when it arrives in mass production in March 2027.
Kusumi did not mention Tesla by name. However, Tesla has long been Panasonic’s largest customer, jointly building a Nevada jack to help Elon Musk’s auto group become a global leader in electric vehicles.
Faced with delays and cancellations from battery and electric vehicle factories, rushing to compete online in Kansas, with slower growth in sales in the face of electric vehicle.
Honda announced Tuesday that it had taken a similar move this year at Toyota, while Nissan abandoned plans for a Japanese battery factory to delay at least two years of battery investment to Canada's $1.1 billion battery investment.
Tesla previously sold a low-cost version of its Model 3 in the United States, which uses a battery from China, but stopped last year. The vehicle will not be eligible for subsidies under the Inflation Reduction Act (US Clean Energy Industry Subsidy Package).
The Texas-based automaker attempts to rely primarily on U.S.-made batteries for models sold in the U.S., but has not fully disclosed the origins of the batteries for each model variant.
Kusumi highlighted the potential risks of electric vehicles sold by its major North American customers, citing that vehicles of a particular automaker have caught fire.
Tesla's vehicles were vandalized in the United States in protest against Elon Musk's controversial leadership of the Department of Efficiency in the Trump administration. The consumer rebound has brought U.S. automakers to their worst quarter since 2022 in the first three months of this year.
"There are risks, but we are planning strong demand for batteries from major customers so far," Kusumi added.
After being behind Tesla in the new stage of adopting electric vehicles, Panasonic lags behind Chinese and South Korean competitors. It has dropped from the world's leading electric vehicle battery manufacturer to fourth place in 2016.
The organization's position could be strengthened when a Japanese battery plant and a new Kansas plant opened in Wakayama last September, which had previously said it would open this spring.
Kusumi refused to provide an exact timeline for starting production, although he said the company had internal goals.
Last week, Panasonic said it would cut 10,000 jobs, equivalent to 4.3% of its workforce, part of a long-awaited restructuring plan to focus on more profitable businesses and consider withdrawing from less profitable businesses, including turning it into a household-known television unit.