What Trump ending EV tax credits could mean for De Soto’s new Panasonic factory

Panasonic could see delays in full production at its recently opened De Soto facility as the market for the batteries it produces changes in response to a federal plan to cut tax credits for electric vehicles (EVs) and other green energy sources.

President Donald Trump’s “Big Beautiful Bill” — the multitrillion dollar federal tax and spending package that passed through Congress last month — would effectively eliminate a $7,500 tax credit for consumers who purchase or lease a new EV and a $4,000 credit for those who purchase a used EV. The change takes away a major perk incentivising people to buy electric vehicles.

“While the U.S. EV market is undergoing a temporary adjustment due to policy changes and other external factors, we remain confident in its medium- to long-term growth,” a Panasonic spokesperson said in a statement Monday. “We will closely monitor policy developments, particularly in the U.S., to drive further growth.”

According to reporting from the Kansas Reflector, the plant was anticipated to reach full production by March 2027, but a new target date hasn’t been set yet. However company, state and local government officials remain optimistic about the project.

“We started mass production at the Kansas facility last week, and it has always been our plan to grow our North American business in a sustainable manner within the market,” the Panasonic spokesperson said in the statement. “We have seen 11% growth in US electric vehicle sales in Q1 this year compared with last year.”

Panasonic officials alongside federal, state and local leaders celebrated the grand opening of the 4.7 million square foot facility on Monday after nearly three years of construction.

De Soto Mayor Rick Walker said that the new federal cuts may impact the EV market for a little bit, but he remains optimistic about the plant’s future.

“You’ve got to keep focused on the big picture and the long game, and I’m very positive that EV adoption and demand will continue to grow, maybe not as fast if you had a $7,500 credit, but we’re still … in a growth position,” Walker said.

Panasonic jobs

The $4 billion project is expected to create 4,000 new jobs over time, but it’s not clear when, or if, all those jobs will come. Kansas’ incentive package for the company did not include any specific requirements for the number of jobs or the wages the company will pay.

So far, the company has hired 1,100 employees with 88 positions open on its career page. The Panasonic spokesperson said that the company anticipates filling 2,000 positions by next year, but beyond that will be determined by customer demand.

While the EV market fluctuates because of the federal policy change, Kansas’ incentives will be protected and remain in place, Lt. Gov. David Toland told The Star in an interview after the grand opening on Monday.

“I think the most important thing at the federal level is the 45X credit was retained as part of the reforms that were done by Congress, and that’s a key incentive for Panasonic,” Toland said. “So we’re thrilled that that remains in place at the state level.”

The 45X credit subsidizes component parts and critical minerals used in clean energy equipment, like the components needed to produce electric vehicle batteries in De Soto. As part of the former Biden Administration’s Inflation Reduction Act in 2022, businesses can only claim the credit for goods produced in the United States or its territories.

Kansas promised a historic $829 million incentive package to Panasonic, but those incentives won’t kick in until Panasonic fulfills its parts of the agreement, Toland said.

The contract requires Panasonic to spend at least $1 billion and to open the factory within the first five years, which it has now done. It also requires that the factory stay open and operating for at least 15 years. There are clawback provisions in the agreement if Panasonic were to leave the state before 15 years.

While the agreement didn’t include job hiring requirements or minimum wage or salary standards, the incentives won’t roll unless the Panasonic factory has a large enough payroll. If the company creates an annual payroll of $234 million, it’s eligible for $234 million in state rebates over a 10-year period.

“We designed our incentives to be earned incentives where they come after the hiring occurs, after the investment in facilities and equipment occurs,” Toland said. “And so in the event that the company doesn’t hire on the same rate or hire at the same level, the incentives will be reduced at a commensurate level to where they are.”

“We think that’s best practice in economic development. We think that’s the best way to protect the public’s investment in this facility, and we’re proud of it,” Toland said.