Updated January 22nd, 2024 at 09:18 IST
Panasonic shifts focus to productivity amid cooling EV demand
The shift in focus reflects a cautious approach amid signs of cooling demand for electric vehicles (EVs) in the United States.
Panasonic's Group CEO, Yuki Kusumi, stressed on the need for heightened productivity in the company's battery business, potentially delaying plans to construct a third battery plant in North America. The shift in focus reflects a cautious approach amid signs of cooling demand for electric vehicles (EVs) in the United States.
Panasonic Energy, responsible for the battery unit, had initially aimed to decide on the construction of a new factory by the end of March. However, Kusumi stated in an interview that the decision would be made "when the timing is right".
"We need to think about thoroughly raising productivity before setting up a third location," Kusumi asserted at Panasonic's Tokyo office on Friday. The comments come at a time when major automakers, including General Motors and Ford, are adjusting production plans in response to the shifting landscape of EV demand.
Panasonic Energy currently operates a plant in Nevada and has initiated the construction of a second one in Kansas. In December, the company ruled out Oklahoma as a potential site for the new factory. The Kansas plant is expected to increase annual auto battery capacity to 80 gigawatt hours (GWh) with a long-term goal of reaching 200 GWh by early 2031.
Kusumi outlined his directive for the energy unit, stressing that the prioritisation of boosting production volume from existing investments over the immediate decision on the third plant's location. He highlighted that, given the resource-intensive nature of a new plant, a streamlined approach with fewer production sites was generally preferable.
While global consumer demand for EVs is on the rise, certain key markets, notably the United States and Europe, are witnessing a slowdown. The shift, combined with higher interest rates impacting affordability and profitability concerns, has prompted Panasonic to reevaluate its strategy.
Kusumi clarified that Panasonic aims to position the energy unit to generate profits independently, without relying heavily on US legislative incentives like the Inflation Reduction Act (IRA). The company envisions achieving this by enhancing manufacturing processes, thereby ensuring sustained profitability in the evolving landscape of the EV industry.
(With Reuters inputs)
Published January 22nd, 2024 at 08:17 IST