On Monday, July 14, 2025, Kansas Governor Laura Kelly proclaimed “Panasonic Day” in honor of the opening ceremonies for the new electric battery plant in Desoto, Kansas — an opening ceremony Kelly did not attend — but just a few days before the company announced it would be postponing plans to bring the plant to full employment.
On Friday, July 11, Reuters reported Panasonic is no longer planning to bring the DeSoto plant to full capacity by March of 2027 as a result of a slowdown in sales by Tesla, the company’s single largest customer.
Indeed, Reuters reports, “the new target date to reach full production of 30 gigawatt-hours at the $4 billion plant in the U.S. state of Kansas has yet to be fixed, the Nikkei (business daily) said.”
The Sentinel asked both the Kansas Department of Commerce and Governor Kelly’s office if the extensive incentives offered by the state will be affected by the postponement. The Sentinel also asked about incentives to ancillary businesses which have sprung up around the plant, the numbers of such businesses, what incentives they may have received and how those businesses may be affected by this decision.
As of publication, there has been no response.
Property tax and other incentives for projects like this are usually tied to — among other things — hitting specific employment targets.
However, in the case of the “Attracting Powerful Economic Expansion Act” or APEX — which authorized the roughly $829 million incentive package for Panasonic over two years ago — there are no such targets.
As the Kansas City Star reported in January 2023, “The state’s agreement with Panasonic doesn’t require the company to create 4,000 jobs — or any jobs at all. Nor does it create minimum wage or salary standards for the firm — a crucial component of many economic development packages.”
Research indicates that subsidies often don’t produce the desired results. A study of the state’s PEAK program (Promoting Employment Across Kansas) by Professor Nathan Jensen found that PEAK recipients were no more likely to create jobs than non-PEAK recipients. Dr. Arthur Hall of the University of Kansas reached a similar conclusion in a study of STAR bond projects in Wichita.
Additionally, the economic impact that the administration claims for this project, as well as the Integra semiconductor plant, was based on flawed studies.
In the 2023 annual report to the Kansas Legislature, obtained by the Americans For Prosperity Foundation – Kansas, and provided to the Sentinel, Commerce claims that Panasonic will create 8,000 total jobs — 4,000 with Panasonic and 4,000 indirect jobs. The report also claims that: “Each $1 of Kansas APEX incentives will generate $26.06 in estimated economic impact.”
The report further claims that Integra will create 5,155 total jobs — 1,994 with Integra and 3,161 indirect jobs and: “Each $1 of Kansas APEX incentives will generate $218.53 in estimated economic impact.”
The data Commerce used stems from a pair of studies by Wichita State University that were “designed” by Commerce, but Commerce spokesman Patrick Lowry insists they were “independent.”
In the studies, it’s clear that — rather than being “independent” — Commerce’s Chief Counsel Robert North was guiding the project.
- Integra: “The Kansas Department of Commerce, Robert North, Chief Counsel, led the project scope, developed the simulation estimates, and provided overall guidance. Nadira Hazim-Patrick (another Commerce employee) provided project details for the economic and fiscal impacts.”
- Panasonic: “The following people were responsible for the successful completion of the impact study, which includes the data collection and economic modeling. At the Kansas Department of Commerce, Robert North, Chief Counsel, led the project scope, developed the simulation estimates, and provided overall guidance.”
Moreover, the methodology section shows that the economic impact of both programs is — at the very least — overstated.
The studies are not estimating new net economic activity but rather any economic activity around the plants.
In other words, much of the impact will simply be moving existing money around rather than generating new activity. It is also unlikely that the estimates are reduced by the opportunity cost, which is the economic benefit that would result if money for incentives were spent on something else.
“The economic impact estimates from the Department of Commerce might sound good at face value, but Kansans should know they reflect bad policies,” AFPF-KS State Director Elizabeth Patton said at the time. “Hardworking taxpayers should understand these estimates are meant to protect the power and reputation of the Commerce Department and its pet projects.”
