Panasonic chooses Kansas for Tesla EV battery plant, state puts $4 billion in investment

A person is seen next to the Panasonic Corp logo at the Panasonic Center in Tokyo, Japan February 2, 2017. REUTERS/Kim Kyung-Hoon

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July 14 (Reuters) – Japan’s Panasonic Energy Co, a major supplier to Tesla Inc, said on Wednesday it had selected Kansas as the site for a new battery plant that state officials said would create up to 4,000 jobs with up to $4 billion in investment.

Panasonic Energy, a unit of technology conglomerate Panasonic Holdings Corp, chose Kansas over Oklahoma for the plant after Kansas Gov. Laura Kelly pushed the state legislature to approve a stimulus package of up to $1 billion earlier this year.

The plant, to be built in De Soto, on the western border of the Kansas City metropolitan area, is at the center of the company’s drive to increase production of electric vehicles as it pushes for increased battery power and performance. The company already has a factory in Nevada that supplies Tesla. Read more

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In a statement, the Kansas Department of Commerce said the state will refund Panasonic $829 million in subsidies after the company completes investments and hiring.

Kansas estimates $2.5 billion in annual economic activity from the plant, which will offset the state’s largest package of development grants.

State officials said their announced job creation and investment targets await approval from Panasonic’s board. A Panasonic spokesman told Reuters that no decisions had been made on the new plant’s production capacity, the amount of investment and the size of the workforce.

By 2029, Panasonic plans to increase battery production capacity three to four times, with most of the increase in North America.

Panasonic is working to supply Tesla with a more powerful, larger battery known as the Model 4680, starting with production in Japan.

In a statement, the Oklahoma Department of Commerce said it is “optimistic about additional opportunities” to win investment from Panasonic in the future.

“With the increased electrification of the automotive market, expanding battery production in the United States is critical to meet demand,” Panasonic Energy President Kazuo Tadanobu said in a statement.

Shares in Panasonic Holdings were up 0.6 percent at 0205 GMT, while Tokyo’s benchmark Nikkei rose 0.7 percent.

The decision on whether to build the plant in Kansas or Oklahoma came “down to the wire” three weeks ago, U.S. Ambassador to Japan Rahm Emanuel told reporters Thursday.

The plant will primarily supply batteries to Tesla, but is not limited to the company run by CEO Elon Musk, and will have a research department focused on the next generation of batteries, Emanuel said.

The deal came after President Joe Biden spoke with Panasonic executives in May when he visited Japan, Emanuel said.

Other battery makers have also announced plans to invest in U.S. production or began talks with government officials in recent months, part of an industry trend to meet expected growth in electric vehicles and reduce reliance on Chinese manufacturing and associated supply chain risks. deliveries.

South Korean battery makers have announced investment plans of $5.5 billion this year in U.S. plants.

China’s Contemporary Amperex Technology Co Ltd ( CATL ) ( 300750.SZ ), the world’s top battery supplier, has also been eyeing U.S. manufacturing sites, people familiar with the discussions said.

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Reporting by Tiyashi Datta in Bengaluru, Hyunjoo Jin in San Francisco and Rocky Swift and Mayu Sakoda in Tokyo; Written by Kevin Krolicki; Editing by Anil D’Silva, Margherita Choi, Richard Chang and Kenneth Maxwell

Our standards: The Thomson Reuters Trust Principles.

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