Panasonic Energy, a key supplier for Tesla and other electric vehicle manufacturers, is prioritizing the removal of Chinese components from its U.S. battery supply chain. This strategic shift, described as a “No. 1 objective” by Allan Swan, President of Panasonic Energy of North America, underscores the growing pressure on global companies to reassess their manufacturing processes in light of potential trade policy changes.
Former U.S. President Donald Trump’s proposed tariffs on imported goods, particularly from China, have catalyzed this move. Trump’s platform included a 10% tariff on global imports and a 60% tariff on Chinese goods, along with threats of a 25% tariff on imports from Canada and Mexico.
Swan emphasized the urgency of diversifying the supply chain away from China in response to these potential tariffs. While Panasonic Energy currently utilizes some Chinese suppliers, the company aims to phase out this reliance. This acceleration of pre-existing plans reflects a proactive approach to mitigating potential disruptions and cost increases.
The majority of raw materials for Panasonic Energy’s U.S.-made batteries are sourced from international suppliers, including those in Canada. Last month, Reuters reported that Trump’s transition team recommended tariffs on battery materials globally, further highlighting the need for a resilient and diversified supply chain.
Panasonic Energy operates a battery factory in Nevada and is slated to open a second facility in Kansas this year. To achieve its supply chain goals, the company is implementing a “three-pronged attack”: securing contracts with U.S. suppliers, encouraging its existing Japanese and Korean suppliers to establish U.S. operations, and partnering with companies already planning to expand into the American market. This comprehensive strategy aims to build a robust American supply chain for its battery production. Swan stated that Panasonic has established ambitious targets for achieving this objective.
This move by Panasonic Energy reflects a broader trend among Japanese businesses navigating the uncertainties surrounding trade policies. Companies like Nissan and Honda have expressed concerns about the potential impact of U.S. tariffs on Mexico, a crucial production hub for the American market. Similarly, heavy machinery manufacturer Komatsu has warned of the detrimental effects a potential U.S.-Canada trade war could have on its business. Panasonic Energy’s proactive approach highlights the increasing importance of strategic supply chain management in a rapidly changing global landscape.
