The initial annual production capacity is expected to reach one million compressors, which will support the growing demand in the United States for energy-efficient HVAC systems with low greenhouse gas impacts. The compressors will utilize twin rotary technology and cater primarily to ductless heat pump systems, over 90% of which are currently manufactured in Asia.
Strategic Investment and Support
The project will receive $50 million in funding over three years from the U.S. Department of Energy’s Office of Manufacturing and Energy Supply Chains (MESC), which aims to enhance domestic manufacturing of energy-efficient technologies. Mitsubishi Electric will also benefit from economic assistance programs provided by the Commonwealth of Kentucky.
Mitsubishi Electric stated that these financial and logistical supports were pivotal in selecting the U.S. as the site for the factory.
Expanding U.S. Presence
Since 1980, Mitsubishi Electric has been expanding its HVAC operations in the U.S., culminating in the formation of Mitsubishi Electric Trane HVAC US LLC in 2018, a joint venture with Trane Technologies. The new factory in Kentucky will produce compressors that will be integrated into the products distributed by this joint venture, further solidifying the company’s footprint in the U.S. market.
Market Growth and Future Plans
The global market for air conditioning and refrigeration systems is experiencing robust growth due to increased demand for energy-efficient and environmentally friendly technologies. Mitsubishi Electric has identified the air conditioning and refrigeration sector as a key growth area, particularly in markets like the U.S., where local production can help meet regional needs and streamline supply chains.
By manufacturing compressors domestically, the company aims to reduce lead times, enhance its responsiveness to market changes, and bolster its development and manufacturing capabilities. This initiative aligns with Mitsubishi Electric’s broader strategy to transition towards sustainable, energy-efficient solutions in the HVAC industry.