MADRID (Reuters) – A joint venture between the U.S. unit of Spanish engineering group ACS and Philadelphia-based Yates Construction has won a contract to build an electric vehicle (EV) battery plant in Kansas as part of a $4 billion investment by Japan’s Panasonic group, the companies said on Wednesday.

The EV battery factory in the city of De Soto is expected to start operating by the end of March 2025 and will reach approximately 30 gigawatts-hour of annual production capacity, according to a statement by ACS’ Turner Construction.

“The battery manufacturing facility is a critical part of Panasonic’s investment in the United States to expand EV battery production capacity,” the company said.

In addition to the assembly facility, the project will include construction of a central utility plant and support buildings, it added.

The new federal subsidy policies signed into law in August as part of the U.S. Inflation Reduction Act tie up to $3,750 per vehicle of federal tax credits to requirements that EV batteries be manufactured in North America using materials sourced there or from allied nations.

(Reporting by David Latona; Editing by Simon Cameron-Moore)