Tesla pressures longtime partner to accelerate key production goal: 'Really starting to pay off now'

Thanks to a growing demand for electric vehicle battery production in the United States, it appears that Tesla is asking its largest supplier to step up its game.

As reported by the Financial Times, Panasonic has felt added pressure from its "main customer" to speed up the start of production at its new Kansas production facility. Tesla has long been considered to be Panasonic's largest customer due to their long-standing business relationship throughout the years.

Panasonic CEO Yuki Kusumi spoke to a pool of reporters regarding Tesla's insistence. "As we've been told by our customer to get Kansas moving quickly, we're hurrying to do so," Kusumi said, per the Financial Times.

In November 2022, Panasonic began construction of its De Soto, Kansas, facility to produce cylindrical Li-ion batteries for EVs. The move is aimed at expanding the existing production of Panasonic's 2170 EV batteries that are used by Tesla.

"There are risks, but we are planning on robust demand for batteries from our main customer as of now," added Kusumi.

Despite the desire to ramp up its domestic supply of EV batteries, Tesla has experienced a rocky start to 2025. In its first quarter earnings report, Tesla acknowledged that its sales numbers have been drastically reduced from the prior year. The company has faced widespread criticism amid CEO Elon Musk's involvement in the U.S. government, most notably with the Department of Government Efficiency.

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Regardless of disappointing sales numbers, Teslarati reported that Karn Buhiraj, vice president of supply chain at Tesla, confirmed that the company has made a noticeable effort to increase battery cell production in the U.S. This move has already been deemed a success during Tesla's most recent earnings call.

"And we're also working on moving the upstream supply chain for battery cells to the United States for several years," Buhiraj said, per the publication. "And that strategy is really starting to pay off now."

With Panasonic gearing up its production in Kansas, Tesla may be positioning itself to withstand the current trade market, potentially avoiding a price increase for customers. In the meantime, EV owners can continue to save money by installing solar panels at home to cut the cost of charging. Solar panels at home can be significantly cheaper than using public charging stations.

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