With Panasonic Energy, Hexagon Purus Systems has inked a multi-year contract for the supply of lithium-ion battery cells.
The battery cells will be manufactured at Panasonic’s brand-new facility in Kansas.
Production will be in accordance with the United States-Mexico-Canada (USMCA) trade agreement.
Production will benefit from the incentives provided by the Inflation Reduction Act of 2022 for battery cell manufacturers based in the U.S.
Early in 2026, the supply of battery cells will start. Subject to the accomplishment of specific objectives, Hexagon Purus will prepay about USD 43 million until 2025 as part of the supply agreement. With this advance payment, Panasonic’s Kansas production plant will provide Hexagon Purus access to battery cell capacity.
The transportation industry must cut emissions by 75% until 2050 in order to meet the 1.5°C goal established by the Paris Agreement back in 2015. In the United States, the California Air Resources Board (CARB) and the Environmental Protection Act (EPA) have both put out suggestions and rules that address the need for additional emissions reductions in the transportation sector.
In California, CARB has instituted regulations for fleet owners as well as a rule for vehicle manufacturers. Regulations are designed to lower emissions and hasten the adoption of zero-emission vehicles in California’s transportation industry.
Advanced Clean Truck (ACT) and the proposed Advanced Clean Fleet (ACF) regulations are two significant regulations for achieving the net zero target.
From 2024 on, while selling or running a fleet of trucks in California, truck manufacturers and fleet owners will be obliged to have steadily increased Zero Emission Vehicle content.
Massachusetts, New Jersey, New York, Oregon, and Washington are the other five U.S. states that have enacted the regulations, while two more states (Colorado and Maine) are now undergoing the public adoption process.
According to the ACT, new additions to fleets of class 7 and 8 trucks operating to and from intermodal seaports and railyards must be ZEV starting in 2024, and 5% of all new class 7 and 8 trucks sold in California in that year must be ZEV.
The ACT law also encourages investments in supply chain and infrastructure and mandates that 100% of truck manufacturers’ sales in 2040 must come from ZEVs, thereby ending the sale of internal combustion engine trucks in California.
In California, there are over 1.8 million commercial trucks running every day, of which 219,000 are class 7 and 8 trucks. The cumulative impact of the ACT and ACF laws, according to CARB, would result in around 0.5 million ZEVs on Californian roads by 2035, rising to 1.6 million by 2050.