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Panasonic has announced a delay in reaching full production at its De Soto battery plant in Kansas due to declining electric vehicle (EV) sales and shifting U.S. federal policies that are less favorable to green energy initiatives.
The update was reported by Nikkei Asia, indicating uncertainty around when the plant will now achieve full operational status, originally planned for March 2027.
Policy Changes and Market Trends Create Uncertainty
The De Soto facility, hailed as the largest economic development project in Kansas history with a $4 billion investment, is reportedly facing challenges because of reduced EV demand at Tesla and policy rollbacks under President Donald Trump.
Notably, Trump’s “big, beautiful bill” plans to eliminate tax credits for electric vehicle purchases by September 30, alongside reducing other green energy incentives.
Kansas and De Soto Offered Major Incentives
Construction on the Panasonic plant began in 2023 after the company secured lucrative benefits under Kansas’ APEX program, designed to attract major development. These included:
- $829.2 million in state tax incentives over 10 years
- Rebates for capital investment, payroll, and workforce training
- A 0.5% reduction in the state’s corporate income tax rate
The De Soto community also committed to $229 million in public infrastructure upgrades — including roads, water, and sewer systems — funded via Tax Increment Financing (TIF), in exchange for Panasonic employing at least 2,500 workers, though 4,000 jobs were projected at peak production.
Local Officials Respond to Setback
De Soto Mayor Rick Walker expressed disappointment in the lack of federal support for companies working to reshore manufacturing jobs in the U.S. He acknowledged the slowdown in EV sales had been expected but remains optimistic:
“While earlier estimates expected 50% of new car sales to be EVs by 2030, that number has been adjusted to 40%, which still represents significant market growth,” said Walker.
Despite the delay in production, Walker emphasized the local excitement surrounding the plant’s grand opening ceremony, scheduled for Monday.
Economic Activity Already Underway
According to Theo Stavropoulos, spokesperson for the Kansas Department of Commerce, the project has already generated significant economic momentum:
- 1,100 employees have been hired
- 1,100 new housing units are under construction in De Soto
- Local businesses are benefiting from increased foot traffic and higher sales tax revenues
- Property taxes are decreasing due to rising commercial activity
While Stavropoulos did not comment on whether the revised production schedule could impact Kansas’ incentive commitments, he reaffirmed the state’s dedication to supporting the project’s long-term economic impact.
Although Panasonic’s De Soto battery plant is facing delays due to a changing EV landscape and shifting federal policies, both state and local leaders remain committed to its success.
With jobs already created, infrastructure investments underway, and community excitement building, the project is still poised to be a cornerstone of Kansas’ economic future — even if full production takes longer than expected.