Tesla battery supplier feels pressure to expedite US production

Tesla battery supplier Panasonic is feeling pressure to expedite electric vehicle (EV) cell production at its Kansas plant.  

Panasonic’s main customer, Tesla, is reportedly urging the battery supplier to step up its game due to growing demand for EV cell production in the United States. The push underscores Tesla’s strategic pivot to bolster U.S.-based battery supply chains during trade challenges.

According to the Financial Times, Panasonic CEO Yuki Kusumi noted that its primary customer is pressing for a faster start at the company’s De Soto, Kansas facility in a Tokyo interview with foreign media. Panasonic’s battery facility in Kansas has been under construction since 2022.

“As we’ve been told by our customer to get Kansas moving quickly, we’re hurrying to do so…There are risks, but we are planning on robust demand for batteries from our main customer as of now,” Kusumi said.

The recent U.S.-China tariff truce eased broader tensions, but left EV battery tariffs untouched. These persistent tariffs, alongside other U.S. measures, appear to be prompting Tesla to lean on Panasonic’s Kansas plant, which is set to boost the company’s U.S. production capacity by 60% by March 2027. Panasonic’s long-standing partnership with Tesla underscores its critical role in the US EV market.

Tesla addressed battery supply concerns in its latest earnings call.

“We’ve been working very hard to expand battery cell production in the US, both with vendors and what Bonnie mentioned earlier with the 4680 program. And we’re also working on moving the upstream supply chain for battery cells to the United States for several years. And that strategy is really starting to pay off now,” said Karn Buhiraj, Tesla VP of Supply Chain.

“As it stands right now, we’re not constrained on battery cell supply for vehicles. The recent tariffs do pose some challenges to Tesla Energy, well, like our CFO mentioned earlier, but it’s something we’ve been anticipating and we should be able to resolve in a timely fashion,” he added.

As Panasonic ramps Kansas operations, Tesla’s pivot to domestic batteries strengthens its resilience against trade barriers, positioning both companies to capitalize on the demand for affordable EVs while navigating a complex tariff landscape.

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