Tesla supplier makes cutting China supply for US business its ‘No 1 objective’
Panasonic boss reveals how Trump’s pledge to raise tariffs has forced companies to reassess processes
07 January 2025 - 14:14
byAbhirup Roy and Kantaro Komiya
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Las Vegas — Tesla supplier Panasonic Energy plans to eliminate its supply-chain dependence on China for electric vehicle batteries made in the US, a senior executive told Reuters, calling the shift a “No 1 objective”.
The comments from Allan Swan, president of Panasonic Energy of North America, highlight how president elect Donald Trump’s pledge to raise tariffs on imported Chinese goods has forced companies around the world to reassess their manufacturing processes.
Panasonic Energy, which supplies batteries to Tesla and other automakers, is a unit of Japanese electronics giant Panasonic.
Trump has vowed to impose tariffs of 10% on global imports into the US, along with a 60% tariff on Chinese goods. In November, he specifically pledged a 25% tariff on imports from Canada and Mexico when he takes office on January 20.
The first thing the business has to do in regards to Trump’s plans is “not to have the supply chain dedicated from China,” said Swan at the CES trade show in Las Vegas on Monday.
“We do have some Chinese supply but we don’t have a lot,” he said. “And we have plans not to have some, as we go forward, and that has accelerated.”
The bulk of the raw materials for Panasonic Energy’s US-made batteries come from overseas suppliers, including ones from Canada, Swan added.
Reuters last month reported that Trump’s transition team recommended tariffs on battery materials globally. The Washington Post on Monday reported his aides were exploring narrower tariff plans covering critical imports, which Trump later denied.
In the US, Panasonic Energy operates a factory in Nevada and plans to open a second 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 Korean suppliers set up shop in the country 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 his trade policies.
Automakers like Nissan and Honda have hinted at possible impacts from US tariffs on Mexico, a low-cost production and export hub for the American market.
Heavy machinery maker Komatsu last month said a potential US-Canada trade war would be a “one-two punch” on its mining equipment business.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Tesla supplier makes cutting China supply for US business its ‘No 1 objective’
Panasonic boss reveals how Trump’s pledge to raise tariffs has forced companies to reassess processes
Las Vegas — Tesla supplier Panasonic Energy plans to eliminate its supply-chain dependence on China for electric vehicle batteries made in the US, a senior executive told Reuters, calling the shift a “No 1 objective”.
The comments from Allan Swan, president of Panasonic Energy of North America, highlight how president elect Donald Trump’s pledge to raise tariffs on imported Chinese goods has forced companies around the world to reassess their manufacturing processes.
Panasonic Energy, which supplies batteries to Tesla and other automakers, is a unit of Japanese electronics giant Panasonic.
Trump has vowed to impose tariffs of 10% on global imports into the US, along with a 60% tariff on Chinese goods. In November, he specifically pledged a 25% tariff on imports from Canada and Mexico when he takes office on January 20.
The first thing the business has to do in regards to Trump’s plans is “not to have the supply chain dedicated from China,” said Swan at the CES trade show in Las Vegas on Monday.
“We do have some Chinese supply but we don’t have a lot,” he said. “And we have plans not to have some, as we go forward, and that has accelerated.”
The bulk of the raw materials for Panasonic Energy’s US-made batteries come from overseas suppliers, including ones from Canada, Swan added.
Reuters last month reported that Trump’s transition team recommended tariffs on battery materials globally. The Washington Post on Monday reported his aides were exploring narrower tariff plans covering critical imports, which Trump later denied.
In the US, Panasonic Energy operates a factory in Nevada and plans to open a second 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 Korean suppliers set up shop in the country 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 his trade policies.
Automakers like Nissan and Honda have hinted at possible impacts from US tariffs on Mexico, a low-cost production and export hub for the American market.
Heavy machinery maker Komatsu last month said a potential US-Canada trade war would be a “one-two punch” on its mining equipment business.
Reuters
US new car sales hit five-year high in 2024
Elon Musk calls for Nigel Farage to quit as Reform party leader
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.