Company tells legislators EV battery facility to begin operation in early 2025
TOPEKA — Panasonic executives involved in construction of the $4 billion electric vehicle battery plant at De Soto said Tuesday the facility would begin production in early 2025 and negotiations continued with Evergy on delivery of electricity to manufacturing space occupying 4.7 million square feet.
The company broke ground in July 2022 on a project backed by up to $1 billion in state economic incentives with the promise of employing 4,000 people in production of lithium-ion batteries used in vehicles. In testimony to the House energy committee, Panasonic said the December decision not to build a comparable plant in Oklahoma didn’t indicate presence of supply-chain or market-force challenges capable of undermining the Kansas plant.
“We are extremely committed to our growth and development in Kansas,” said Tina Jeffress, a Panasonic group manager for sustainability and energy. “We do not anticipate any issues when it comes to ultimate market demand for our product. This is a generational investment in Kansas and as you can see from how quickly we are putting steel in the ground and developing other infrastructure on site, we are full speed ahead when it comes to this project.”
Panasonic, the battery supplier to electric vehicle maker Tesla, said installation of steel framing in De Soto on one side of the two-wing plant was 93% completed, while steel components on the second wing were 44% completed.
Rep. John Carmichael, a Wichita Democrat, said the cost of building electricity substations and miles of electricity transmission lines to accommodate Panasonic would be paid by consumers in Evergy’s central region, which included Emporia, Topeka and Wichita. Typical ratepayers in Johnson County where the plant has been located wouldn’t be part of that rate obligation, he said.
“We know that bringing our load onto the grid does come with some concerns from various stakeholders,” Jeffress said. “We are committed to paying for any energy infrastructure that is dedicated and serving our site. We have reiterated that commitment time and time again that we will pay for infrastructure that is directly serving our facility.”
She said that pledge was limited to infrastructure on its manufacturing site. Panasonic also adjusted downward its projections for energy consumption and remained focused on making efficient use of the power grid, she said.
Questions of fairness
Carmichael said the cost of electric rate discounts awarded substantive economic development projects such as Panasonic would be borne by Evergy’s central region customers.
“What steps do I need to take legislatively to prevent my constituents from paying for infrastructure and rate increases that benefit Johnson County?” Carmichael said.
“Thank you for the question,” Jeffress said. “While we will not necessarily tell you how to do your job, what I can do is address this from the company’s perspective. We have not yet opted into a rate and we are committed to paying for our direct-serve infrastructure. We recognize there is broader infrastructure being built both for us as well as for other economic development and capacity needs in the region.”
She said emergence of large power customers such as Panasonic would lead to “downward pressure on rate increases over time.”
Carmichael asked whether the decision by Panasonic to back away from Oklahoma raised the potential of economic shifts leaving Kansas with a large manufacturing building and utility infrastructure that was no longer needed in De Soto.
“Should I be concerned that within the next two to five years the same types of economic and supply chain problems will result in the closing of the plant in Johnson County leaving us with an albatross?” he said. “What’s going to be done to keep that expenditure from being stranded assets?”
Jeffress said Panasonic was committed to the success of the Kansas battery plant and the emergence of more renewable energy sources such as solar and wind in the state. She said the company would welcome the opportunity to purchase off the grid the solar power generated by a complex placed near the Panasonic plant.
“Panasonic makes electric vehicle batteries, but our commitment to being positive stewards of the community,” she said. “We are very committed to environmental stewardship and that is really at the core of our business strategy and what we are doing here in Kansas. Our priority is seeing the penetration and the percentage of renewables growing in the region.”
She said Panasonic continued to negotiate with Evergy on electricity rate for the plant and was interested in blending renewable energy into its procurement strategy.
The workforce challenge
Rep. Nick Hoheisel, R-Wichita, and Rep. Laura Williams, R-Lenexa, asked Panasonic officials about progress on broadening education, child care and housing systems near De Soto in anticipation of higher demand from the company’s 4,000 workers.
Julie Sailors, community affairs manager for Panasonic, said De Soto was proceeding with the proposal for a child care facility capable of serving 112 children. It would operate from 6 a.m. to midnight, she said, to reflect the objective of operating multiple shifts at the battery manufacturing plant.
“That will be interesting to see how that does,” Williams said. “Obviously, child care is an issue and we’re looking at more options that go outside the normal work hours.”
Sailors said Panasonic was working collaboratively with Johnson County Community College and Kansas City Community College on workforce training to develop a pipeline of potential plant employees. Additional connections were being formed with public and private universities in the state, she said.
In December, Panasonic announced it no longer anticipated building an electric vehicle battery plant in Oklahoma. The company had selected in April a potential site in Tulsa, Oklahoma, for a third plant in the United States. Panasonic operates a facility in Nevada, which in June said it would expand EV battery production by 10% by March 2026.
Kansas Reflector is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Kansas Reflector maintains editorial independence. Contact Editor Sherman Smith for questions: info@kansasreflector.com. Follow Kansas Reflector on Facebook and Twitter.
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