Panasonic’s vision for massive Kansas battery plant becomes reality with grand opening

This article was originally published by Kansas Reflector.

DE SOTO — Hundreds from around the world gathered Monday to celebrate the grand opening of the Panasonic electric vehicle battery plant in De Soto and tour the 4.7 million-square-foot facility that claims the tag of the state’s biggest economic development project ever.

The Japanese ambassador to the United States, Panasonic leaders, and local, regional and national elected officials praised the partnership required to bring the project to fruition. Panasonic is expected to invest $4 billion in the plant, and the Kansas Department of Commerce estimates it will bring $2.5 billion to the state’s economy annually.

The state offered $829 million in incentives to Panasonic through the Attracting Powerful Economic Expansion Act, or APEX.

“Just two and a half years ago, November 22, we stood on this very ground,” said Allan Swan, president and chief operating officer of Panasonic Energy Corp. of North America. “At that point, it was just a big open field, but we had a whole vision to build a world-class facility that would power the future of clean transportation, create thousands of jobs, new high-quality jobs, and serve as the catalyst for economic growth in Kansas and across the region.”

“Today,” he said, “that vision is a reality.”

One week ago, the first production line began operating, and it will take three to four months for it to achieve full capacity, Swan said after the ceremony.

By early January, Swan said, three additional lines will be operating and construction will begin on a second wing of the building, which is expected to house an additional four lines in about 18 months.

Currently, the plant makes about 50,000 battery cells per day — at a rate of about 70 per second — and employs 1,100 people, Swan said. It is expected to employ 4,000 people when at full capacity.

Reports by international media that decreased Tesla sales will delay the move to full capacity are just part of being in a new business, Swan said.

“We’re in a brand new industry,” he said. “That industry is going to ebb and flow a little bit as she grows, and she will grow, and we’re clearly growing in one direction. It’s not going to change. The beauty of Kansas is we can build these lines out. We’ve got customers that want them, so we should be in a good place.”

Batteries won’t begin to ship out to customers for three or four weeks because of rigorous safety and quality testing, Swan said.

The Marketplace

Customers who will use the electric vehicle batteries in their products were in attendance, including representatives from Lucid Motors, Toyota, Harbinger Motors and Tesla. Nick Twork, spokesman for Lucid, said they were pleased to see a new plant built. 

“It’s really great because obviously it allows us to have a domestic supply chain for battery cells,” he said. “This facility will start supplying us next year, and we’ll ship batteries to our factory in Arizona.”

Upcoming changes to U.S. policies, like eliminating tax credits for buying electric cars, aren’t really something that concerns Lucid, Twork said.

“As long as it’s a level playing field, that’s the most important thing,” he said. “Obviously that’s going to affect the marketplace, so we’ll adapt as necessary. We’re an agile business, and we’ll do what it takes.”

Twork said he wasn’t willing to comment on any acrimony the public is feeling about Tesla products and reports the company’s sales are down.

“From our standpoint, we’ve had six consecutive quarters of record growth for the company,” he said. “We keep selling more vehicles, so more and more customers are finding out about what Lucid has to offer.”

Supply Chains

U.S. Sen. Jerry Moran spoke at the ceremony and afterward said trade negotiations need to take place to get rid of barriers that keep U.S. products out of international markets.

“But as I’ve indicated to the ambassador today, we’re going to do everything we can to make sure that the outcome of those conversations between Japan and the United States are beneficial to both countries,” Moran said.

The federal government wants supply chains brought home, he said.

“This is an example of where business that was being done outside the United States will now be done in the United States,” he said of the Panasonic plant.

Swan said Panasonic is working to bring more suppliers to locate in the United States. Three already have space in the De Soto plant.

“It’s an ongoing process, and we’ll keep working with our suppliers who already exist to see whether we can get them here to the United States, or find another way of creating a stronger supply chain,” Swan said.

There are still 6,000 acres near the plant that could be used for expansion or where suppliers could build. Swan said the company would like to see that developed and is working with the state of Kansas to bring suppliers “as close as possible.”

Swan praised the De Soto plant as the largest plant his company has built with top-of-the-line manufacturing capabilities.

“We built the first one with Tesla over in Nevada, so that’s their factory. This is our factory,” he said. “We’ve redesigned it to make it quite more productive. There is roughly 10% less machinery here and a lot more automation, so that’s where the innovation comes in. The lines here are the fastest lines that we’ve ever had.”

The labor-saving production lines are expected to achieve approximately 20% higher productivity compared to the Nevada factory, a press release said.

Workforce Training

All of those who spoke Monday highlighted the partnerships that it took to make such a large project successful. Speakers repeatedly mentioned the collaboration with local community colleges to help the company train the workforce it needs.

Greg Mosier, president of the Kansas City Kansas Community College, said new programs at the school train Panasonic’s entry level skilled maintenance technicians and advanced engineering technicians.

The program is a mix of schooling at the community college and working at the Panasonic plant, he said.

“We developed it in partnership with Panasonic, and then it’s also 16 credit hours, so they get a college certificate with it as well,” Mosier said. “It’s an apprenticeship model, so they are on the regular 16-week schedule. They do two days at the college, three days at the factory.”

In response to a Panasonic request, the community college was able to condense the program to eight weeks, he said. After completing the course and working full time at Panasonic, Mosier said, students are earning $50,000 to $60,000 per year.

Japanese Investment

The investments Panasonic is making in Kansas will strengthen the state’s economy and do much more, said Yasuaki Takamoto, CEO of Panasonic Energy Corp. of North America.

“What happens here is just the first step in building a stable and secure domestic supply chain, one that’s becoming a reality thanks to our ongoing investment and partnership,” he said. “We are supporting domestic production with critical EV components, strengthening North America’s manufacturing ecosystems and helping America maintain its competitive edge.”

Takamoto said that selecting Kansas for the plant meant choosing the community and the workforce they believed in.

“Since then, we built relationships that will last for years to come,” he said.

Japanese ambassador Shigeo Yamada highlighted the strong relationship between the United States and Japan, saying Japan has been the strongest investor in the United States in the past 50 years and has created 1 million jobs.

“Japanese investment in this country is about much more than just dollars and cents,” he said. “By working hand-in-hand with local communities, Japanese companies are building enduring ties and a sense of trust with their peoples. These personal ties — connections — form the very foundation on which the bilateral relationship is built and allowing us to collaborate, not just as allies, but as trusted friends.”

This article was corrected to say that 50,000 battery cells are made per day.