(Adds details from the press conference)
TOKYO, Oct 31 (Reuters) – Japan’s Panasonic Holdings Corp said on Monday it will start building a new battery plant in Kansas in November and aims to begin mass production by March 2025, targeting the market in rapid growth of electric vehicles in North America.
The conglomerate’s energy unit said in July it had chosen Kansas as the site of a new factory to supply batteries primarily to Tesla Inc, joining other battery producers planning massive U.S. investments to qualify for the new tax credit rules for electric vehicles and to tap into the potentially massive demand in this market. .
Panasonic said in a statement it expects an initial production capacity of 30 gigawatt hours per year at the new plant. This equates to approximately 60% of the company’s current annual EV battery production capacity in Japan and the United States.
Kansas state officials said in July the plant would create up to 4,000 jobs with an investment of up to $4 billion, pending final approval from Panasonic’s board of directors, which has been returned on Monday.
Hirokazu Umeda, chief financial officer of Panasonic Holdings Group, declined to give a specific figure for the investment during an earnings briefing on Monday, but said as a rough estimate it would be “on a scale of more than 4 billions of dollars”.
The company said the plant will produce its Model 2170 lithium-ion battery cells, which are already supplied to Tesla, but could eventually manufacture the more advanced 4680 format battery currently under development, which is about five times larger. and will offer major improvements in terms of cost and range of vehicles.
“We decided to start with the 2170 model, which can be launched with a sense of certainty and speed due to the need for batteries as soon as possible,” Umeda said.
Panasonic has announced that it will begin mass production of the 4680 model at its plant in Wakayama, western Japan, by the end of March 2024, with later expansion to production in North America.
Umeda said the mass production ramp-up is going according to plan.
Panasonic also lowered its full-year operating profit forecast to 320 billion yen ($2.16 billion) on Monday from 360 billion yen for the year ending March 31. That compares to an average of 349.9 billion yen forecast by 19 analysts.
Panasonic posted an 11% drop in second-quarter operating profit, but performed better than analysts’ estimates.
It reported operating profit of 86.1 billion yen for the three months to the end of September, compared with an average profit of 81.6 billion yen estimated by nine analysts, according to Refinitiv data. A year earlier, the company earned 96.8 billion yen.
Although sales of its energy business increased, operating profit fell due to higher raw material and logistics prices, as well as higher development expenses and fixed costs as she was increasing production.
Rivals China’s CATL and South Korea’s Energy Solution saw strong battery profit growth after passing on some of their cost increases to customers. ($1 = 147.9800 yen) (Reporting by Satoshi Sugiyama; Editing by Edmund Klamann)