How do you know when your sales are getting really bad? When they’re so low that they’re hurting one of the largest electronics companies in the world. Tesla’s slumping electric vehicle sales mean supplier Panasonic is lowering targets for its plant in Kansas, after already smashing the brakes on a brand new plant it was going to build in the US. Banking on Tesla is one of the reasons for a massive restructuring for Panasonic, which is planning to cut 10,000 jobs.
Tesla
Tesla, Inc. is an American electric vehicle manufacturer largely attributed to driving the EV revolution. Through the Model S and subsequent products, Tesla has innovated and challenged industry conventions on numerous fronts, including over-the-air updates, self-driving technology, and automotive construction methods. Tesla is considered the world’s most valuable car brand as of 2023, and the Model Y the world’s best-selling car in the same year, but the brand’s greatest achievement is arguably the Supercharger network of EV charging stations.
- Founded
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July 1, 2003
- Founder
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Martin Eberhard, Marc Tarpenning
- Headquarters
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Austin, Texas, USA
- Owned By
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Publicly Traded
- Current CEO
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Elon Musk
The EV battery division of Panasonic was one of the first to ever build cells for EVs, starting back in 1997 before lithium-ion tech was available. It became a major supplier for Tesla in the US, and for automakers worldwide. Earlier this year, Panasonic said it had built batteries for 3.7 million EVs, and did it “without any vehicle recalls due to battery-attributed issues.”
Panasonic Was Looking At A Third US Factory
It built its first US production facility along with Tesla’s Nevada Gigafactory. Increasing demand and anticipated Cybertruck sales lead to Panasonic building a second plant in the US, this one in Kansas. The $4 billion plant was to be the largest in the world. It was set to open this year and employ up to 4,000 staff, building 30 gigawatt-hours per year. Now, Nikkei reports, it will not reach full capacity in 2027 as planned.
The report did not specify how much Panasonic, which also builds for Lucid had been forced to cut its predictions. But with Tesla sales down 13% last quarter and CyberTruck sales measured in the thousands instead of the hundreds of thousands promised by CEO Elon Musk, it’s likely to be a significant change.
Last year, Panasonic put a stop to a plan to build a third US battery factory. It hadn’t yet chosen a location, but Oklahoma and other states were in competition for the thousands of new jobs that will no longer happen.
Manufacturing Impacts Widespread
It’s not just Panasonic and Tesla that are affected, either. A report last month said Automotive Energy Supply Corp, which was building a battery factory in South Carolina to supply BMW there, is in trouble. The plant, which was planned under the Biden administration’s push to bring EV manufacturing into the US, was on pause. The 1,600 jobs were delayed by a “substantial tariff bill” to import the needed machinery, as well as steel and aluminum needed to fabricate the building and the battery packs.
Other smaller suppliers, including Kore Power and Aspen Aerogels have announced cancellations of billions in scheduled US battery production investments, with more canceled projects in the first quarter than in 2023 and 2024 combined. The Washington Post reported that hundreds of millions of dollars in battery production investments “appear to be stalled” as Inflation Reduction Act incentives looked to be on the verge of vanishing.
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All of those announcements came before news that the $7,500 federal EV incentive was ending as part of the Big Beautiful Bill. That change is expected to hurt sales of EVs, especially those built in the US, which received the most generous of the subsidies.
Sources: Nikkei, Washington Post
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