Amid an economy made uncertain by the end of federal tax breaks for electric vehicle buyers, falling Tesla sales and looming tariffs, Panasonic celebrated the official opening of its $4 billion electric vehicle battery plant Monday with a limited factory tour and ribbon cutting.
Initial production began July 7 at what is being touted as the largest business investment in Kansas’s history — a plant that is expected to have about 4,000 employees once it is fully operational.
The event was full of positive energy. Buses of company dignitaries were on hand, as well as a contingent of Japanese and American press. “This is a joyful day,” said U.S. Sen. Jerry Moran, during remarks as the day opened.
But there appeared to be a few clouds over the business future of a plant built to push out lithium ion batteries used in electric vehicles and hailed by some as a cleaner energy alternative.
Despite political climate, “the outlook for EVs is still strong,” De Soto mayor says
The recent passage of an omnibus spending bill will end $7,500 in federal tax credits for buying a new electric vehicle and $4,000 for a used one. Meanwhile Tesla founder Elon Musk’s political involvement in right-wing politics has coincided with a drop in that company’s sales. Tesla is a major customer for the Panasonic plant.
Those factors caused Panasonic Holdings to slow its production timeline at the De Soto plant, according to reporting from Nikkei Asia.
Allan Swan, president and COO of Panasonic Energy of North America, was asked after the opening whether production has been adjusted because of the current political climate.
“No,” he said. “We just had to get up and running. It took a while because the quality of these batteries is huge,” and safety checks take additional time.
He did acknowledge some fluctuation in production speed on the way to 2027, when full production has been estimated.
“We’re in a brand new industry, so that industry’s going to ebb and flow a little bit as she grows, and she will grow,” Swan said, adding that the direction toward growth will not change.
De Soto Mayor Rick Walker was also unfazed by the less-than-ideal projections.
“I think the outlook for EVs is still strong,” he said. “The uptick is going to be a little bit slower, but it’s still a growth market, so I think we’re still in a very good position here.”
Panasonic has hired about 1,100 so far
The first production line ramped up Monday, July 7, and about 50,000 cells are being produced each day. It will take about four to six weeks of testing before the batteries will be sent to customers, Swan said.
The next three lines are expected to begin operation between now and early 2026, and the remaining four lines after that should also be able to produce by the end of next year, he added.
The company has so far hired about 1,100 employees, which is about a quarter of the workforce officials have said to expect when everything is running at full capacity.
Japanese ambassador assures “enduring ties” in the wake of Trump’s tariffs
Tariffs announced by President Donald Trump are also contributing to tensions between the U.S. and its trading partners. Most recently Trump criticized Japan on its trade practices and set a reciprocal 25% tariff on Japanese imports to begin Aug. 1.
Swan noted that the Panasonic customers who were praised during his opening remarks — Tesla, Lucid, Harbinger and the Tern semi-tractor — are all made in America and that Panasonic will be working on any upcoming supply chain issues. He said officials would like to encourage suppliers to locate close to De Soto as well.
Shigeo Yamada, Japan’s ambassador to the United States, offered reassurances on international relationships during opening remarks.
Business partnerships with Japan have created a strong relationship of “enduring ties and a sense of trust between our two leaders,” he said.
“These personal ties, connections, form the very foundation on which the bilateral relationship is built and allow us to grow not just as allies but as partners and friends,” he said, also noting that Japan has supported about a million U.S. jobs in the past five years and is the United States’ largest foreign investor.
Festivities included a sake barrel ceremony and song
Politics aside, the grand opening was a festive affair with an emphasis on Panasonic corporate culture. About 300 attended the opening remarks, including top Panasonic North American officials.
Speakers noted how far the project has progressed in three years, and how important it would be for Kansas.
Moran said success comes from working together, and “not the arguments that at times take place where I work but the cooperation and civility and desire for outcome.”
“As a native Kansan and lifelong Kansan, I can say that sometimes we look for someone from outside Kansas to tell us that we’re OK, that what we have here is a good thing,” he said. “Panasonic’ s decision to locate this plant here in De Soto is that stamp of approval that we all so much appreciate.”
Kansas Lieutenant Governor David Toland interspersed his comments with Japanese translations. He spoke about the corporation’s seven guiding principles, which were also the subject of a song written by Ryan Willis, special assistant to Toland, during Kansas officials’ pitch to get the plant. There was also a taped performance of Willis singing it, and a video of remarks by Gov. Laura Kelly, who could not attend.
Elected and company officials also donned black jackets and took the stage for a traditional sake barrel ceremony, in which they whacked the top of two barrels in unison with wooden mallets. According to the program notes, the ceremony symbolizes prosperity and good fortune.
Those who went to the factory viewing were greeted at the door with a performance by the seven-member Three Trails Taiko drummers, of the Kansas City area. The brief tour consisted of three viewing windows overlooking aspects of the rolling assembly line. No photos were allowed.
Other Panasonic news: Panasonic’s $4 billion De Soto plant is close to opening. But Trump’s policies could delay hiring
