(Bloomberg) -- Panasonic Holdings Corp. has decided on Kansas as the location to build a battery production site expected to cost $4 billion, as the Japanese manufacturer seeks to ramp up production capacity to meet growing demand from Tesla Inc. and other electric-vehicle makers.
Panasonic applied for the project to receive incentives from Kansas and those plans were approved by Governor Laura Kelly, who announced the agreement Wednesday. The site is expected to generate as many as 4,000 jobs, according to a statement.
“With the increased electrification of the automotive market, expanding battery production in the US is critical to help meet demand,” said Kazuo Tadanobu, chief executive officer of Panasonic Energy Co., in the statement.
Panasonic has been scouting sites in Oklahoma and Kansas for its multibillion-dollar factory, Bloomberg News reported in March. The newly planned plant is part of Panasonic's push to increase investment in EV cell production -- a segment the 104-year-old Japanese electronics giant sees as critical for future growth.
For Panasonic, the Kansas location comes with the benefit of being close to the new factory that Tesla recently opened in Austin, Texas.
Though Panasonic has supplied Tesla from its early days, the Japanese manufacturer has been slower to build scale compared with rivals LG Energy Solution of South Korea and China's Contemporary Amperex Technology Co. Instead, Panasonic has stressed that it is prioritizing profit and dedication to safety over market share.
With its latest move, the Japanese company joins a slew of automakers and cell producers preparing for a predicted boom of EV sales in the US by building local battery production facilities.
In September, Ford Motor Co. and South Korea's SK Innovation Co. announced plans to spend $11.4 billion for an assembly plant and three battery factories in Kentucky and Tennessee. A few months later, Toyota Motor Corp. said it would open its first battery factory in the US, in North Carolina.
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