Panasonic Energy has decided to cancel its schedule for expanding production capacities, citing weaker demand in North America. The previously announced target of reaching 200 GWh of battery cells per year by 2031 will no longer be tied to a specific target year, as reported by Nikkei Asia.
The Japanese company, known for its partnership with Tesla in the electric car battery cell market, had announced plans about a year ago to quadruple its capacity to 200 GWh per year by March 2031. This expansion was intended to focus more on production in North America. However, Panasonic CEO Kazuo Tadanobu stated that the company has decided to prioritize aiming for a decent profit and a certain market share, rather than fixating on the target number, given the current market conditions.
Panasonic’s decision is indicative of the evolving market expectations, especially regarding Tesla. The electric vehicle manufacturer recently cancelled its target of selling 20 million vehicles a year by 2030. Panasonic’s adjusted plans align with Tesla’s market outlook.
Despite the slowdown in North America, Panasonic acknowledges that the market for electric cars in the region is still growing, albeit at a slower pace than anticipated. The company had previously aimed to triple its turnover to over 3 trillion yen (19 billion US dollars) and quadruple its production capacity for electric vehicles to 200 gigawatt hours by the 2030 financial year.
Looking ahead, Panasonic is shifting its focus to Japan as a second pillar of growth. The company is reportedly considering converting some of its domestic production lines, initially intended for North American customers, to produce batteries for potential Japanese customers. Talks are underway with Mazda Motor and Subaru to supply cylindrical lithium-ion batteries for EVs.
In North America, Panasonic currently operates a joint factory with Tesla in Nevada, with another factory under construction in Kansas. A third plant is also under consideration, with an investment decision expected by March 2024. Tadanobu commented that Panasonic has already evaluated various opportunities and is prepared to make swift decisions if needed.
