By JOHN HANNA
TOPEKA, Kan. (AP) — Japan’s Panasonic Corp. selected Kansas as the location for a multibillion-dollar mega-factory to produce electric vehicle batteries for Tesla and other carmakers, Gov. Laura Kelly announced Wednesday.
The decision comes five months after the Democratic governor and Republican-controlled Legislature rushed to approve a taxpayer-funded incentive package of as much as $1 billion, the state’s largest ever, to attract the company and the promised “thousands of jobs,” even though most of them didn’t know what company was in play. Kelly said Wednesday that the actual incentives will total $829 million over 10 years.
The plant will be located in De Soto, Kansas, a town with about 6,000 people and 30 miles southwest of Kansas City, Missouri.
“People across the country are looking at Kansas as a leader in economic development,” Kelly told a gathering of about 250 state officials and business leaders in downtown Topeka Wednesday.
Japanese broadcaster NHK reported this year that the company was looking to build the factory in Kansas or Oklahoma, close to Texas, where Tesla is building an electric-vehicle plant. The two companies jointly operate a battery plant in Nevada.
Kelly’s administration said the facility it was pursuing would be the largest economic development project in Kansas history. They said the company would employ 4,000 people and that other businesses supplying or supporting it would add several thousand more jobs. They said the company would pay an average of $50,000, which would far exceed Kansas’ median income for individuals of less than $32,000.
Kelly pushed for the permission to offer tax credits, payroll subsidies and training funds to lure what her administration said was a $4 billion project that at least one other state was also pursuing.
The measure requires the state to cut its corporate tax rates by half a percentage point for every big deal closed so that all businesses benefit. That would save companies roughly $100 million a year and drop the state’s top rate to 6% from 7% if two deals close.
Backers of the measure argued that Kansas has lost out on other large projects because it couldn’t offer generous enough incentives.
Oklahoma’s Republican-controlled Legislature approved an incentive package this year to offer rebates of up to nearly $700 million in state funds if Panasonic reached specific benchmarks, including at least a $4.5 billion capital expenditure and the creation of at least 4,000 jobs during the project’s first four years. State officials say that money could be returned to the general fund or used to lure another major project.
Ohio recently offered Intel Corp. incentives worth roughly $2 billion to secure a new $20 billion chipmaking factory. Michigan lawmakers in December approved $1 billion in incentives, two-thirds of it for General Motors for plants to assemble batteries for electric vehicles.
Electric vehicle maker Canoo has announced plans to open a factory in northeastern Oklahoma next year that is expected to create 2,000 jobs.
But Wisconsin scaled back incentives for electronics giant Foxconn. It was supposed to invest $10 billion there and create 13,000 jobs but the deal now is for about 1,450 jobs with an investment of $672 million by 2026.
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TOPEKA – Kansas Governor Laura Kelly announced Wednesday that Panasonic Energy Co., Ltd., plans to build one of the largest electric vehicle (EV) battery manufacturing facilities of its kind in the United States in Kansas. Pending approval by Panasonic Holdings Corporation Board of Directors, the company has identified a site in De Soto for the potential project.
The planned project is expected to create up to 4,000 new jobs and result in an investment of up to $4 billion, which represents the largest economic development project in Kansas history. The development will have ripple effects throughout the regional and state economy, supporting an estimated 4,000 additional jobs created by suppliers and community businesses and 16,500 construction jobs as cited in an independent Wichita State University economic impact study.
“As the largest private investment in Kansas history and one of the largest EV battery manufacturing plants of its kind in the country, this project will be transformative for our state’s economy, providing in total 8,000 high-quality jobs that will help more Kansans create better lives for themselves and their children,” said Kansas Governor Laura Kelly. “Winning this project shows that Kansas has what it takes to compete on a global scale -- and that our pro-business climate is driving the technological innovation needed to achieve a more prosperous and sustainable future.”
This planned state-of-the-art facility will create and supply lithium-ion batteries and accelerate the future of electric vehicle innovation on a global scale. Panasonic Energy’s current U.S. battery manufacturing operation has shipped more than six billion EV battery cells. Panasonic Energy plans to expand its production of EV batteries as the automotive industry shifts to more sustainable electric technologies. The proposed development would boost the regional economy, creating opportunities for suppliers and community businesses.
"With the increased electrification of the automotive market, expanding battery production in the U.S. is critical to help meet demand," said Kazuo Tadanobu, President, CEO of Panasonic Energy. "Given our leading technology and depth of experience, we aim to continue driving growth of the lithium-ion battery industry and accelerating towards a net-zero emissions future.”
Lieutenant Governor and Commerce Secretary David Toland noted competition for this milestone project was strong and required a coordinated effort from the state. A key component of that undertaking was the enactment of the bipartisan Attracting Powerful Economic Expansion (APEX) Act earlier this year.
“Once Governor Kelly signed APEX into law,” Toland said, “the state gained the necessary economic development tool to pursue megaprojects that could transform the Kansas economy. Panasonic recognized Kansas as not just a contender, but as the ideal partner for this revolutionary project.”
Panasonic Energy selected Kansas due to its business-friendly climate, robust talent pool and workforce skillset, support of technology innovation, strong transportation infrastructure, and central location. This builds on Kansas City’s legacy manufacturing and automotive industry strengths.
“With this major development, Kansas is being recognized around the world for our talented workforce, innovative environment, and quality of life,” said U.S. Senator Jerry Moran (Kan.). “Panasonic will bring thousands of good-paying, high-quality jobs to our state which will be a massive economic benefit for local businesses and our communities for decades to come. With the goal of making Kansas a destination for industry, defense, education, science, technology, engineering, and innovation, we will keep our students, their knowledge and intellect in Kansas.”
Kansas has an established battery manufacturing sector with seven establishments employing approximately 1,300 individuals. The state was ranked second in the nation for employment and wage concentration in the sector in 2021. With the opportunity to potentially add an additional 4,000 jobs, this deal will make Kansas an industry leader at a time when the sector is predicted to grow at an annualized rate of 2.4 percent.
“Kansas is proving itself to be an attractive place where entrepreneurs can unleash innovation and create jobs,” said Senator Ty Masterson, President of the Kansas Senate. “The Panasonic announcement shows that attraction is global.”
“When the Kansas Legislature passed the APEX legislation, this was the kind of megaproject we had in mind,” said Representative Ron Ryckman, Speaker of the Kansas House of Representatives.
The proposed Panasonic project is the latest economic development win recently announced by the state:
- Last month, Governor Kelly said the state surpassed $9 billion new, private-sector investments since January 2019 resulting in more than 43,500 jobs being created or retained.
- Also in June, Kansas was awarded Area Development Magazine’s prestigious Gold Shovel Award for the second year in a row. The back-to-back wins are unprecedented in state history.
- In March, Kansas won the Governor’s Cup from Site Selection Magazine for having the country's most economic development investment per capita.
“On behalf of the City Council and the community, I am thrilled to welcome Panasonic Energy to De Soto. The scale of Panasonic Energy’s investment in our community will usher in unprecedented generational economic prosperity for the state and region,” said De Soto Mayor Rick Walker. “We are honored to be part of it.”
The Kansas City region is the third fastest-growing tech market in the U.S. and is a nucleus of engineering, technology, and automotive manufacturing expertise. With a strong talent pipeline and cutting-edge training programs, the Kansas City market employs nearly 21,000 workers who contribute to the $19 billion KC transportation manufacturing industry.
“Panasonic Energy made the right choice to select the Kansas City region due to our market’s strengths in EV and tech innovation,” said Tim Cowden, President and CEO of the Kansas City Area Development Council. “This announcement, alongside FIFA’s selection of KC as 2026 World Cup host city, our new single-terminal airport coming online and global tech companies investing in the market, reinforces the transformational success our region is having on a global scale.”
“The electric vehicle industry is expected to grow eight times its size in less than 10 years, which is an incredible opportunity for states, communities and energy partners to support leading, innovative technology companies,” said David Campbell, President and CEO of Evergy. On behalf of our region’s business community, we are very excited to welcome Panasonic Energy to Kansas and the Kansas City Region, and we look forward to supporting your long-term success.”
The following organizations supported the recruitment of Panasonic Energy to Kansas: Kansas Department of Commerce; Kansas Department of Transportation; Kansas Department of Health and Environment; Kansas Department of Children and Families; the Honorable Rahm Emanuel, U.S. Ambassador to Japan; the U.S. Embassy to Tokyo; Kansas Children’s Cabinet and Trust Fund; City of De Soto; De Soto Economic Development Council; Evergy; Sunflower Development Group; KC SmartPort; Johnson County Community College; Kansas City, Kansas Community College; Peaslee Tech; University of Kansas; Ewing Marion Kauffman Foundation; and Kansas City Area Development Council.
To learn more about the project, its economic impact, and incentives package, read a one-pager here.