Construction of Panasonic's New EV Battery Factory in Kansas to Start in November

author: Eric Walz   

Tesla's long-time battery partner Panasonic will begin construction of its new electric vehicle battery factory in Kansas in November, as the company aims to ramp up production to meet growing demand from automakers.

The factory initially will produce 30 GWh of cylindrical lithium ion (Li-ion) 2170 batteries, which Panasonic said are in high demand from its automotive customers. Launching the facility to produce 2170 batteries will help Panasonic fulfill its orders more quickly, the company said in a press release.

Panasonic introduced the improved 2170 lithium-ion cells for the Tesla Model 3, which went into production in the summer of 2017. The 2170 cells pack are more energy dense and can accept higher charging rates than the previous 18650 cell format cells Tesla was using in the Model S.

Mass production of the 2170 batteries at the plant in De Soto, Kansas is targeted to begin by the end of March 2025. Once operational, the factory will significantly boost Panasonic's EV battery production capacity in North America.

The facility in De Soto, Kansas will be the Company's second EV battery facility in the U.S., following the Panasonic Energy of North America (PENA) facility in Sparks, Nevada that supplies batteries to Tesla.

Panasonic selected the site in Kansas for its second North American battery factory due to the proximity to Tesla's new assembly plant in Austin, Texas. Austin is now Tesla's global headquarters after Chief Executive Elon Musk moved the automaker's headquarters from California in Dec 2021.

Panasonic's battery factory in Nevada is known as "Gigafactory 1" and is located near Reno. Over the past several years, the Gigafactory has grown to be the largest lithium-ion battery factory in the world. 

"As the global shift to EVs accelerates, we are looking into ways to strengthen our battery production capacity in North America and meet the growing demand from our automotive partners," said Kazuo Tadanobu, President, CEO of Panasonic Energy Co., Ltd. "With our superior technology and extensive experience, we will drive the growth of the Li-ion battery industry."

Although the factory in Kansas will initially produce 2170 format batteries, Panasonic Energy Co., Ltd CEO Kazuo Tadanobu told investors and analysts in July that the company has already shipped samples of its new, more powerful "4680" format EV batteries to Tesla.

Panasonic's new 4680 format battery cells (46 millimeters width and 80 millimeters tall) are roughly five times bigger than those that Panasonic currently supplies to Tesla, meaning that the new cells could help the EV leader lower its production costs, while still increasing the range of its vehicles. 

Panasonic says its new and improved nickel-cobalt-aluminum 4680 cells will store more energy, reduce battery costs by up to 50% and drive a 100-fold increase in battery production by 2030. 

Tesla also uses batteries supplied by China's Contemporary Amperex Technology Co (CATL) and South Korea's LG Energy Solution.

Panasonic Energy Co., Ltd. was established in April 2022 as part of the Panasonic Group's switch to a new holding company system. Panasonic Holdings Corporation serves as a holding company and eight companies are positioned under its umbrella. 

The Panasonic Energy Co., Ltd. division provides battery technology-based products globally, including lithium-ion batteries for EVs, storage battery systems and dry batteries.

In March 2021, Panasonic sold its stake in Tesla that was worth about 400 billion yen ($3.61 billion) at the time. Panasonic originally purchased 1.4 million Tesla shares at the bargain price of $21.15 back in 2010, two years before Tesla introduced the Model S sedan. A Panasonic spokesperson told Reuters last year that the decision to sell its stake in Tesla was made as part of a review of shareholdings in line with corporate governance guidelines.  

Although Panasonic sold its stake in Tesla, the company said there will be no charge in its business partnership with the automaker going forward and the two companies will continue to produce batteries in the U.S. for Tesla's electric vehicles in Nevada and at the new factory in Kansas.

Panasonic Energy Co., Ltd. was established in April 2022 as part of the Panasonic Group's switch to a new holding company system. Panasonic Holdings Corp serves as a holding company and eight companies are positioned under its umbrella. 

The Panasonic Energy Co., Ltd. division provides battery technology products globally, including lithium-ion batteries for EVs, storage battery systems and dry batteries.

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.