Panasonic, the Japanese manufacturing giant, said on Wednesday that Oklahoma was no longer a candidate for a new battery plant. The state offered a multibillion-dollar incentive package to land the project at its MidAmerica Industrial Park in Pryor. Gov. Kevin Stitt could not discuss the deal’s details because of non-disclosure agreements with Panasonic, but state officials praised it as a “megadeal.”
The company’s decision comes after a year of turmoil for Panasonic. The company encountered difficulty at its Gigafactory in Nevada with production and cost issues that sent Tesla seeking other battery suppliers.
Last year, the company announced plans to build another battery cell factory in the United States, allowing it to produce more of the critical building block for EV batteries. At the time, it was still being determined whether the new factory would be intended for Tesla, which is still Panasonic’s biggest customer. Panasonic has clarified that it will buy all the viable battery cells it can use.
It wasn’t necessary to clarify whether the new plant was expected to be ready in 2023 or later. At that time, the company’s chief executive, Kazuo Tadanobu, told reporters, “We “will consider the most suitable location based on the market situation and business conditions.”
So, “sources familiar with PanaPanasonic’s ranking tell Bloomberg that the decision to pull back on the project results from a change in strategy for the battery maker, which is also exploring other uses for its lithium-ion batteries. Specifically, it aims to reduce its carbon footprint by cutting energy use at the plants where its batteries are produced. This effort is called GREEN IMPACT.
The company is reportedly looking into producing more giant battery cells for electric vehicles, such as the 4680 model that Tesla plans to use for its Model 5X and other future vehicles. This bigger size could allow the cars to travel farther on a single charge, a crucial development in the industry.
A big question remains, however, as to whether the battery-cell industry is large enough to support a new plant. The company would be competing against other battery makers and existing customers like Tesla. The market for lithium-ion batteries is growing fast, but it still needs to be determined whether the industry can support a second new plant.