Panasonic Energy, Panasonic's battery arm, announced on December 20 that it will no longer pursue a plan to build a battery factory in Oklahoma, USA. Although not specifying the reason, the company said it will continue to seek opportunities to expand in North America.
The Oklahoma plant would have been Panasonic's third battery factory in North America. In April, the Oklahoma State government said it has signed an agreement with Panasonic to offer the battery maker investment rebates of almost US$700 million if it pursues the project.
Panasonic said then that it had not made any specific decision beyond the rebate agreement. The company also said it was considering growing production capacity at its Nevada or Kanas plants.
According to Reuters and Nikkei Asia, Panasonic decided to terminate the battery project in Oklahoma after careful deliberations. It will concentrate on opening the Kansas plant, a US$4 billion investment, by March 2025.
Nikkei also reported that Panasonic still intends to decide the location of its third battery plant in North America by the end of March 2024. With the end of the Oklahoma project, the company will likely build a new factory on the land left at the Nevada site or somewhere near the Kansas plant, which is under construction.
Panasonic has been a long-time battery supplier for Tesla. According to South Korea-based SNE Research, the Japanese company accumulated 37.3GWh of global EV battery usage from January to October 2023, ranked fourth worldwide. Its battery installation grew by 30.8% from 2022.
In November, Panasonic said EV demand in North America has shifted to more affordable vehicle models. High-end EVs are experiencing a slower market. Therefore, the profitability of Panasonic's battery business has deteriorated.
Hirokazu Umeda, Panasonic Group's chief financial officer, said last month that battery demand for high-end Tesla Model S and Model X declined rapidly, prompting Panasonic to halt part of its battery production lines in Japan. The output volume reduced by 60% from April to June 2023.
