Panasonic Energy is expanding its role in next-generation mobility with a new multi-year agreement to supply cylindrical batteries to Amazon’s autonomous vehicle unit Zoox beginning in early 2026. The arrangement marks a strategic pivot for the Japanese battery producer, which is increasingly looking beyond traditional electric-vehicle makers as growth in the U.S. EV market softens. The move positions Panasonic at the center of a rapidly evolving robotaxi landscape, where consistent supply of high-performance cells remains a critical bottleneck.

A Strategic Partnership Supporting Zoox’s Robotaxi Expansion
The supply contract will initially rely on Panasonic’s Japanese facilities before transitioning production to the company’s Kansas plant, signaling an investment in U.S.-based capacity aligned with major automakers’ nearshoring strategies. The agreement also reflects Zoox’s ambition to scale its autonomous ride-hailing network after beginning free public rides in select areas of San Francisco last week.

Zoox, fully owned by Amazon, is under increasing pressure to differentiate itself from rivals such as Waymo, Cruise, and a growing number of Chinese autonomous vehicle developers. Ensuring a stable supply of high-density cylindrical cells—specifically Panasonic’s 2170 format—provides the power consistency necessary for autonomous systems, onboard computing, and extended route operations.

For Panasonic, the Zoox partnership reinforces its diversification strategy. While Tesla remains its most notable automotive customer, the company is seeking to strengthen relationships across the mobility sector as the traditional EV market becomes more uneven and pricing pressure intensifies.

Battery Manufacturing Shifts to the U.S. Amid Industry Realignment
Panasonic’s decision to incorporate its new Kansas plant into the Zoox supply chain underscores accelerating shifts in the global battery ecosystem. U.S.-based production is increasingly prioritized by automakers and federal policy frameworks, particularly as supply-chain resiliency and geopolitical considerations reshape investment patterns.

The Kansas facility, designed to increase annual output and serve multiple North American clients, is a cornerstone of Panasonic’s long-term expansion strategy. Integrating Zoox demand helps the plant secure stable forward volumes at a time when broader EV demand forecasts have been revised downward. Several automakers have slowed production targets, citing declining consumer appetite and financing constraints.

Market Pressures Highlight the Need for Diversification
The supply agreement arrives just weeks after Panasonic Holdings reduced its annual profit forecast, citing weaker-than-expected battery sales in the U.S. The slowdown reflects a broader reassessment across the EV sector as inflation, high borrowing costs, and competitive price cuts weigh on margins.

The partnership with Zoox therefore serves not only as a growth catalyst but also as a hedge against volatility in the traditional EV market. Autonomous fleets require predictable replacement cycles and high utilization rates, potentially offering Panasonic smoother demand visibility compared to consumer EV sales.

Looking Ahead
As autonomous mobility accelerates toward commercial viability, suppliers capable of delivering scale, efficiency, and localized production will shape the industry’s competitive trajectory. Panasonic’s alignment with Zoox signals a confident push into a sector expected to grow sharply through the late 2020s. With robotaxi operators racing to secure supply before fleet expansion, the company’s early positioning may prove increasingly valuable. Yet the sustainability of this strategy will depend on how quickly autonomous services gain regulatory approval and market acceptance.