- Panasonic says the U.S. has an opportunity to scale back its dependence on China for electrical automobile batteries.
- A rising variety of battery makers are shifting away from the China-centric provide chain for EV batteries.
- The Japanese battery maker opened its second U.S. manufacturing unit in Kansas in July.
Electrical automobile gross sales have been on a rollercoaster this yr, however the batteries that energy them are nonetheless being constructed at a speedy clip as producers race to safe the associated provide chains. An enormous a part of the push is to scale back America’s reliance on China and construct a sturdy home battery trade.
Regardless of the Trump administration’s rollback of a number of clear vitality applications, the U.S. EV and battery sector continues to be anticipated to develop. It may even decouple from China inside a decade, mentioned Allan Swan, president and chief working officer of Panasonic Vitality Company of North America.
“It’s going to be 10 years of working exhausting on the provision chain, getting the processes proper and efficiencies proper (to decouple from China),” Swan instructed InsideEVs in an interview. “However can the Individuals try this? Completely. I’m very satisfied we are able to.”
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Supply: Panasonic Vitality
Panasonic is doubling down on that wager. Earlier this month, the corporate opened its second U.S. battery plant. The $4 billion manufacturing unit in De Soto, Kansas, is slated to be totally operational by the tip of 2026. As soon as full, it is going to produce sufficient cells to energy roughly half 1,000,000 EVs per yr.
Tesla is Panasonic’s largest buyer, however the firm is broadening its base. Beginning subsequent yr, it is going to provide U.S.-made 2170 cylindrical cells to Lucid Motors, which presently makes use of Panasonic NMC cells manufactured in Japan.
Photograph by: Tim Levin/InsideEVs
“A number of the issues which have been arrange, like 45X (manufacturing credit score) and the tariffs, have put us ready to essentially catch up as shortly as doable,” Swan mentioned. Whereas most pro-EV applications have been scaled again, the Trump administration has thus far stored the 45X superior manufacturing credit score intact. The inducement allocates billions for home lithium-ion battery manufacturing and is crucial for the growth plans of many battery corporations, together with LG Vitality Answer, Tesla and Samsung SDI.
Panasonic is projected to obtain $6.8 billion by the Inflation Discount Act handed below the Biden administration, in keeping with native information studies from Kansas. Swan didn’t verify the determine however acknowledged the corporate is on observe to qualify for the funding. “(The manufacturing credit) will assist us reinvest in batteries in addition to put money into our suppliers and prospects,” he mentioned. “We must always be capable of obtain 45X calls for within the newest construct.”
Photograph by: Panasonic Vitality
Gigafactories like Panasonic’s additionally act as an anchor for the broader provide chain. Very like a conventional fuel automobile plant attracts in Tier 1 suppliers for engines, transmissions and seats, a battery manufacturing unit of this scale encourages cathode lively materials and anode producers to ascertain operations close by. The proximity cuts logistics prices and makes manufacturing extra environment friendly, successfully serving to create a full ecosystem—which is crucial for localization plans.
Panasonic additionally stands to profit from the groundwork laid by others. For instance, suppliers that moved in to serve LG Vitality Answer and Samsung SDI may work with different prospects, Swan mentioned, since many provide agreements within the battery trade are non-exclusive.
Nonetheless, the expansion of the few giant battery corporations is the other of the broader pullback in U.S. clear vitality funding thus far this yr. Greater than $22 billion price of tasks had been canceled within the first half of 2025—together with $6.7 billion in June alone—in keeping with environmental coverage group E2. The cancellations are estimated to have value 16,500 jobs, most of them in Republican-led states and districts.
The wave of reversals adopted a sequence of Trump administration strikes to dismantle federal clear vitality applications, together with freezing Nationwide Electrical Car Infrastructure funds, sunsetting federal EV tax credit on Sept. 30and eliminating penalties below Company Common Gas Economic system (CAFE) requirements.
Nonetheless, automakers and battery corporations appear more and more targeted on their U.S. manufacturing equipment, as Trump’s tariffs have now began to chew. Common Motors will begin making lithium manganese-rich (LMR) cells domestically from 2028 for its full-size SUVs and vans. Ford is engaged on the identical chemistry too. And its BlueOval Battery Park Michigan will make low-cost lithium iron phosphate (LFP) batteries by licensing the know-how from Chinese language battery-maker CATL.
“We imagine that what we’re doing is larger than batteries,” Swan mentioned. “It is about making a a lot cleaner world and we’re very targeted on making certain that our prospects and suppliers even have the identical mission.”
Have a tip? Contact the writer: suvrat.kothari@Insideevs.com
