Panasonic picks Kansas for $4 billion EV battery factory

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Despite passing the billion-dollar incentive package Governor Kevin Stitt requested in April to secure a Panasonic manufacturing plant, the company announced Wednesday that it had chosen Kansas to make a $4 billion investment. of dollars. (Photo by Janice Francis-Smith)

Project Ocean, the name given to the plan to lure Panasonic to Oklahoma with nearly $1 billion in tax incentives and infrastructure upgrades, was scuttled on Wednesday as Kansas said it had won over the manufacturer.

Panasonic had courted Kansas and Oklahoma in its search for a location for a new $4 billion manufacturing plant where the company could build the batteries used in electric vehicles produced by Tesla in Austin, Texas.

Japanese news source Nikkei Asia reported on Wednesday that Panasonic chose the sunflower state for its proximity to Texas – although Oklahoma is closer – and its favorable tax treatment. No word has been provided if Oklahoma lawmakers’ objections to Panasonic’s corporate culture influenced the company’s decision.

The facility will be used to manufacture a new, larger EV battery that can extend range. Panasonic previously announced its goal of tripling or even quadrupling EV battery production capacity by 2028.

The technology was heralded as the future of the auto industry by Governor Kevin Stitt when he announced in April that the state was seeking investment from a then-unnamed manufacturer.

Claiming he couldn’t name the company due to signing a nondisclosure agreement, Stitt nonetheless convinced lawmakers to pass a massive one-week incentive package to provide a quick response to the company.

Project Ocean, as the project has been dubbed, provided nearly $700 million in tax incentives under the Large Scale Economic Development Act (LEAD Act), plus an additional $250 million for modernizing industrial parks such as the Mid-America Industrial Park near Tulsa, where the new facility would have been housed.

Oklahoma’s incentive program included provisions that could benefit electric vehicle maker Canoo, which also has a contract with Panasonic for electric vehicle batteries. Canoo has raised some $400 million in incentives from Oklahoma, but has pushed back production in Oklahoma until 2026.

Arkansas-based Canoo’s 2022 first quarter report showed the company was under financial pressure, having lost $125.4 million in the first quarter of 2022, compared to $15.2 million in the first quarter. 2021. CEO Tony Aquila said the company has proven its ability to raise the capital needed to continue as an ongoing concern.

Oklahoma lawmakers eventually passed the incentive program, but not before extensive debate. Some objected to the secrecy surrounding the deal, some questioned whether the tax incentives were effective, while still others took aim at Panasonic’s corporate policies, which promote diversity and inclusion.

During debate on the bill, some lawmakers argued that the facility, which is expected to create 4,000 new jobs, could attract workers from other states who subscribe to “woke” ideologies.

A group of 11 Republican lawmakers released a statement expressing concern that the company’s support of the LGBTQ+ community promotes the “kind of lifestyle that the vast majority of Oklahomans consider unbiblical and that they do not support”.

Kansas Governor Laura Kelly scheduled a “special event” for 5 p.m. Wednesday, signaling that the announcement would be made. Kelly, a Democrat, had persuaded Republicans in the Kansas Legislature to pass a tax incentive package that could cost the state up to $1.3 billion to secure the $4 billion investment dollars from Panasonic. Kansas lawmakers debated the effectiveness of the tax incentives, but ultimately approved the package.

Governor Stitt’s director of communications, Carly Atchison, said Stitt remains confident in his plan to attract business to Oklahoma.

“This is not the end of the Governor’s strategy to make Oklahoma a Top Ten state for business and Oklahomans would be well advised not to count us out at this time,” he said. Atchison said.

Lawmakers convened a special session, which is currently on hiatus until they choose to return to work. Part of the reason given for the extraordinary session was to consider ways to recover the funds dedicated to the Ocean project if the agreement fell through.

The funds were taken from the surpluses of previous years and do not affect the current year’s budget.

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