© Reuters. FILE PHOTO: Panasonic Holdings Group CEO Yuki Kusumi talks in regards to the firm’s technique in Tokyo, Japan, January 19, 2024. REUTERS/Miho Uranaka/File Photograph
By Daniel Leussink and Miho Uranaka
TOKYO (Reuters) – Panasonic (OTC:)’s battery enterprise should deal with boosting productiveness, Group CEO Yuki Kusumi advised Reuters, signalling the Tesla (NASDAQ:) provider could maintain off constructing a 3rd battery plant in North America as demand for electrical autos cools.
The battery unit, Panasonic Vitality, had beforehand mentioned it aimed to resolve on constructing the manufacturing facility by the tip of March.
However Panasonic Holdings CEO Yuki Kusumi mentioned in an interview {that a} determination can be made solely “when the timing is right”.
“I keep telling people we need to think about thoroughly raising productivity before setting up a third location,” he mentioned on Friday on the firm’s Tokyo workplace.
The feedback come amid indicators of cooling demand for EVs in america which have prompted some automakers, together with Basic Motors (NYSE:) and Ford (NYSE:), to reduce manufacturing plans.
Panasonic Vitality has a plant in Nevada and has damaged floor on a second one in Kansas. In December it mentioned Oklahoma – the place it was beforehand exploring constructing a manufacturing facility – was not a candidate web site.
The unit expects the Kansas plant to take its annual auto battery capability to 80 gigawatt hours (GWh) a yr. It goals to lift that to 200 GWh by early 2031.
Kusumi mentioned his principal instruction to the vitality unit was to prioritise boosting manufacturing quantity from its present funding over deciding on the location of the third plant. Given the human assets necessities of a brand new plant, Kusumi mentioned it was usually higher to have fewer manufacturing websites.
He added there was room to lift manufacturing capability by enhancing processes corresponding to machine upkeep and that point lags as a consequence of altering circumstances occur in any enterprise.
Whereas shopper demand for EVs is rising worldwide, it has cooled in key markets corresponding to america and Europe, and isn’t as worthwhile as business executives had anticipated.
Increased rates of interest have pushed many EVs out of attain for middle-income shoppers who’re additionally ready for cheaper fashions now underneath improvement.
Kusumi mentioned Panasonic wished the vitality unit to enhance its manufacturing in order that it will generate income with out counting on the U.S. Inflation Discount Act, which spurred a wave of investments in new EV battery vegetation there.
The IRA and different U.S. laws present incentives aimed toward boosting home manufacturing of EVs, batteries and uncooked supplies.