Tesla’s Long-Time Partner Panasonic Building $4 Billion EV Battery Plant In Kansas

Panasonic, Tesla’s main battery manufacturer and a key investor since the company’s earliest days, says it intends to build a massive $4 billion battery plant in Kansas to supply packs for the auto industry’s fast-moving shift to electric cars and trucks.

Announced Wednesday afternoon by Panasonic Energy, a unit of Osaka, Japan-based Panasonic, the planned production facility will be situated in De Soto, a Kansas City suburb, and could ultimately employ up to 4,000 people when it opens in a few years. The project will be one of the largest battery plants in the U.S. and is the “largest private investment in Kansas history,” according to Governor Laura Kelly.

“This project will be transformative for our state’s economy, providing in total 8,000 high-quality jobs,” Kelly said in a webcast announcing the news.

Panasonic, which works with Tesla at its Gigafactory in Sparks, Nevada, had been on the hunt for a major new U.S. production facility this year, with media reports suggesting Kansas and Oklahoma were the top contenders.The Japanese manufacturer, which also works closely with Toyota, didn’t specify which automakers it would supply from the De Soto plant when it opens. Panasonic said its existing U.S. assembly lines have already supplied more than 6 billion EV battery cells–most of which are likely powering Teslas.

The announcement follows similarly large investments in new U.S. battery and electric vehicle plants in the past year. Hyundai Motor said in May that it will pour $5.5 billion into a Georgia plant to make EVs and batteries, following news in January that General Motors and LG Chem were building a $2.6 billion battery plant in Michigan.

Last September, Ford and its battery partner, South Korea’s SK Innovation, announced plans to invest more than $11 billion in battery production facilities in Kentucky and Tennessee.

U.S. sales of electric vehicles continue to grow rapidly, despite relatively high prices compared with gasoline-fueled models. While Tesla remains the volume leader, Ford, Hyundai, Kia, General Motors and Volkswagen are all adding new electric models and ramping up production. Sales of battery-only vehicles should reach about 700,000 units this year, and reach about 2.5 million by 2027, according to industry forecaster AutoPacific.

Panasonic revealed last year that it sold its remaining Tesla stake for $3.6 billion but said the companies would continue to work together closely.