It’s official: $4 billion Panasonic battery plant in De Soto set to begin construction in November, with production set for early 2025
photo by: Chad Lawhorn/Journal-World
A $4 billion, 4,000-job manufacturing plant for electric vehicle batteries will break ground in nearby De Soto in the coming days and should be producing batteries by early 2025, Panasonic officials announced Monday.
The international news service Reuters reported Monday that Japanese-based Panasonic Holdings Corp. had given final approval to the massive battery plant, which was preliminarily announced by the company and Kansas economic development officials in July. A groundbreaking is scheduled for November, with some outlets reporting it could be as soon as Wednesday.
The project was hailed as the state’s biggest economic development project in generations, with the plant itself expected to produce 4,000 jobs, while suppliers closely tied to the plan are expected to produce another 4,000 jobs in the area. The state also is estimating 16,500 construction jobs will be created by the plant and related infrastructure and development in the region.
On Monday, Panasonic made clear that the project is now full speed ahead. Reuters reported the company wants to be producing batteries at the plant by March 2025. As part of its quarterly earnings calls, Panasonic confirmed it will be making a lithium-ion battery — its 2170 model — that already is being used by Tesla for its electric vehicles. The company, however, also may use the De Soto plant to produce a larger, more advance battery — known as its 4680 format battery — that is expected to be critical in improving the driving range of electric vehicles and lowering the cost of those vehicles.
But Panasonic’s leader said it did not want to do anything to slow down the start of the De Soto project; thus the company will start production with the existing 2170 model.
“We decided to start with the 2170 model, which can be launched with a sense of certainty and speed because of the need for batteries as soon as possible,” Hirokazu Umeda, Pansonic’s chief financial officer said on the earnings call, according to Reuters.
The battery plant is being built on a portion of the former Sunflower Army Ammunition Plant in De Soto. The sprawling Army complex includes thousands of acres along Kansas Highway 10 between Lawrence and Olathe, with much of the plant now having been annexed into the city limits of De Soto.
De Soto, a Johnson County community of about 6,500 people, is expected to see significant growth as a result of the new plant. But the plant site is only about a 20-minute drive from parts of Lawrence and is about a five-minute drive from Eudora, a 6,500 population city on the eastern edge of Douglas County.
As the Journal-World reported, the Economic Development Corporation of Lawrence & Douglas County recently hired an executive as its “Panasonic opportunities manager” to capitalize on potential development opportunities for the Douglas County area.
While the plant itself will be in Johnson County, the project is expected to create new demand for housing in Eudora and Lawrence, and there’s also speculation that some suppliers to the plant and other spinoff businesses could look to locate in Douglas County.
Rob Richardson, the new Panasonic opportunities manager, told the Journal-World earlier this month that he’s still trying to quantify the spinoff potential for Douglas County but said “I’m pretty confident that we are going to get a good amount of spin-off from the project.”
The Panasonic plant is expected to produce a huge boost to Panasonic’s capacity to produce electric vehicle batteries in the U.S. On its earning call, the company said it expects the De Soto plant to produce 30 gigawatt hours of battery power per year, which is the equivalent of about 60% of the company’s EV battery production in Japan and the U.S., Reuters reported.
Kansas offered unprecedented economic development incentives to convince the company to locate in the state. As reported in July, the state offered incentives of $829 million over 10 years to the company.
The incentives are tied to the size of the plant. At the Monday earnings call, Panasonic’s CFO declined to give a specific dollar amount of the expected investment in the De Soto plant, but said it would be “on a scale of more than $4 billion,” according to Reuters.
Monday’s report didn’t include any information on expected wages at the Panasonic plant, or when hiring may begin at the facility. However, the Journal-World reported in August that an executive with Lawrence-based Peaslee Tech has been working with Panasonic as a future training partner for employees. Those discussions, which included a review of a similar Panasonic plant in Nevada, indicated that virtually all Panasonic positions at that facility were making wages of $50,000 or more.
The August report also noted that Panasonic would like to be hiring employees by the third quarter of 2024, which now seems likely given Panasonic’s announced production date of March 2025.