Tesla Inc supplier Panasonic Energy Co plans to eliminate its supply-chain dependence on China for electric vehicle batteries made in the US, a senior executive said, calling the shift a “No. 1 objective.”
The comments from Panasonic Energy of North America president Allan Swan highlight how US president-elect Donald Trump’s pledge to raise tariff imports on Chinese goods has forced companies around the world to reassess their manufacturing processes.
Panasonic Energy, which supplies batteries to Tesla as well as other automakers, is a unit of Japanese electronics giant Panasonic Corp.
Photo: Reuters
Trump has vowed to impose tariffs of 10 percent on global imports into the US along with a 60 percent tariff on Chinese goods. In November last year he specifically pledged a 25 percent tariff on imports from Canada and Mexico when he takes office on Jan. 20.
The first thing the business has to do in regards to Trump’s tariffs is “not to have the supply chain dedicated from China,” Swan said in an interview at the CES trade show in Las Vegas on Monday.
“We do have some Chinese supply, but we don’t have a lot, and we have plans not to have some, as we go forward, and that has accelerated,” he said.
The bulk of Panasonic Energy’s US-made batteries come from overseas suppliers, including ones from Canada, Swan said.
In the US, Panasonic Energy operates a factory in Nevada and plans to open a second US plant in Kansas this year.
The company has a “three-pronged attack” on modifying its supply chain, Swan said.
It is not only signing up US suppliers, but also helping some of its Japanese and South Korean suppliers set up shop in the nation, and tapping those already planning US operations.
“That’s our main focus about building the American supply chain,” Swan said. “We have set some quite strong targets about what we want to achieve.”
Japanese firms are bracing for the uncertainties around the second Trump presidency, especially in his trade policies.
Automakers such as Nissan Motor Co and Honda Motor Co have hinted possible impacts from US tariffs on Mexico, a low-cost production and export hub for the US market. Heavy machinery maker Komatsu Ltd last month said a potential US-Canada trade dispute would be a “one-two punch” on its mining equipment business.
In related news, Mexico on Monday announced plans for a locally designed affordable small electric vehicle, months after Tesla chief executive officer Elon Musk halted plans for a factory there over the threat of tariff hikes from Trump.
The Mexican government said the vehicles would be manufactured through a public-private partnership and would cost between 90,000 and 150,000 pesos (US$4,430 and US$7,383).
“It will be the first Mexican manufacturer of mini vehicles, developed by Mexican engineering,” Roberto Capuano, head of the company set up to manufacture the cars, Olinia, told reporters at Mexican President Claudia Sheinbaum’s daily news conference.
Capuano said the vehicles would offer Mexicans an alternative to foreign electric vehicle brands, which he called “expensive and out of reach of Mexican families.”
He said the government was currently looking for an assembly site, but that it hoped to roll out the first model by the start of next year’s FIFA World Cup, which kicks off in Mexico City on June 11 that year.
Additional reporting by AFP
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