On January 6th, Panasonic Energy, a supplier for Tesla, announced its plan to reduce reliance on Chinese products in order to produce electric vehicle batteries in the United States. This shift is seen as a top priority for the company.
Panasonic Energy’s North American President, Allan Swan, told Reuters that in response to the incoming Trump administration’s new policies, the first thing his company must do is “not focus the supply chain on China.”
“We do have some suppliers in China, but not many, and we plan to reduce our reliance on these suppliers in the future, a process that is already accelerating,” Swan said.
Panasonic Energy has a factory in Nevada, USA, and plans to open a second factory in Kansas this year.
Swan mentioned that most of the raw materials needed for the batteries produced by Panasonic Energy in the US come from overseas suppliers, including suppliers from Canada.
Swan stated that Panasonic Energy is taking a three-pronged approach in adjusting its supply chain.
They are not only entering into contracts with US suppliers but also assisting some Japanese and Korean suppliers in establishing factories in the US, leveraging suppliers that already have plans to operate in the US.
The comments from Panasonic Energy’s North American President indicate that Trump’s promise to increase tariffs on Chinese goods is forcing companies globally to reassess their manufacturing processes.
Trump has pledged to impose a 10% tariff on goods imported globally into the US, impose a 60% tariff on Chinese goods, and a 25% tariff on imports from Canada and Mexico. Reuters reported last month that Trump’s transition team proposed a tariff on global battery materials.
Panasonic Energy supplies batteries to Tesla and other car manufacturers and is a subsidiary of the Japanese electronics giant Panasonic.
Other major Japanese companies are also preparing for the uncertainty of Trump’s second term, especially concerning his trade policies.
Automakers like Nissan and Honda implied that US tariffs on Mexico could affect them as Mexico serves as a low-cost production and export hub to the US market. Heavy machinery manufacturer Komatsu stated last month that a potential US-Canada trade war would have a “devastating” impact on its mining equipment business.