Kansas Lithium-Ion Automotive Battery Plant Begins Production

Researched by Industrial Info Resources (Sugar Land, Texas)--Last week, Panasonic Energy Company Limited (Osaka, Japan) announced that production has begun from a large lithium-ion automotive battery plant in Kansas. The company states that it is one of the largest automotive battery plants in North America.

Work began on Panasonic's battery plant in De Soto, Kansas, just outside Kansas City, in 2023. At last week's grand opening ceremony, Panasonic executives announced that the plant has begun production of Panasonic's 2170 cylindrical lithium-ion batteries and will ramp to full production of 32 gigawatt-hours (GWh) of batteries per year in the future.

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The Kansas facility is Panasonic's second lithium-ion battery plant in North America, joining its plant in Sparks, Nevada, which commenced production in 2017. A company release describes the Sparks plant: "With approximately 30 years of experience in lithium-ion battery manufacturing and around 8 years of production expertise at the Nevada Factory in Sparks, Nevada, the company has grown the Nevada facility into one of the largest lithium-ion battery manufacturing sites in North America in terms of output, employing over 4,000 people and delivering more than 11 billion cells to date."

The Kansas plant's output will be somewhat smaller than that of the Nevada plant, coming in at 32 GWh per year compared with the Nevada factory's current capacity of 41 GWh per year. However, Panasonic notes that the Kansas plant's use of labor-saving production lines will allow it to achieve approximately 20% higher productivity than the Nevada plant. The new plant is expected to create 4,000 direct jobs and 8,000 jobs in total, including ones in supplier and related industries. Another difference between the two plants is that while the Nevada plant manufactures batteries exclusively for Tesla Incorporated (Austin, Texas), the Kansas plant is "independent and designed to serve multiple customers," a Panasonic spokesperson said in an email to industry publication Automotive Dive. The company's 2170 battery plant in Osaka, Japan, uses specific materials to improve battery performance by about 5%, and the Kansas plant will produce these same cells.

The start of the Kansas factory doesn't come at the best time for the U.S. electric vehicle (EV) sector. U.S. President Donald Trump's administration is ending the $7,500 EV tax credit for new EV purchases at the end of September this year, providing headwinds in the market. A regional NPR station claims that for this reason, Panasonic will delay full production and hiring for the new plant, although Panasonic itself does not seem to have officially indicated this, although it has remained somewhat fuzzy on when full production at the plant will be achieved.

Officials in Kansas and De Soto no doubt hope that the U.S. EV market remains strong as substantial financial incentives were provided at the state and local level to encourage Panasonic to build in Kansas. (Oklahoma was the other strong contender.) In 2022, Kansas offered $829 million in tax incentives in agreement to the company spending $4 billion on the plant and remaining in Kansas for at least 15 years. De Soto agreed to perform $229 million in public infrastructure projects such as new roadway construction, water treatment projects and a new fire station. De Soto's agreement is contingent on the factory's employing at least 2,500 people, slightly more than half of the 4,000 direct jobs announced by Panasonic. The plant was built at the Astra Enterprise Park, the former site of the Sunflower Army Ammunition Plant, which has been dormant since the mid-1990s and which the city has sought to repurpose.

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