Panasonic will ramp up battery production for data centers in U.S. by fiscal 2028

Panasonic Holdings, a Japanese industrial conglomerate that has spent decades manufacturing batteries for electric vehicles, is pivoting part of its strategy toward data centers. According to the company's CEO, Panasonic plans to launch mass production of battery cells for data centers at a facility in Kansas (USA) by fiscal year 2028, redirecting a significant portion of investments previously earmarked for AI infrastructure toward this direction.

Why data centers became a new customer

Companies that have for years supplied batteries for electric vehicles have discovered a new and far more demanding customer — the data center. The explosive growth in computing power needed for training and running AI models has dramatically increased the burden on power systems: data centers require reliable energy storage for backup power and smoothing peak loads, and demand for such solutions is growing faster than demand for transportation batteries.

For Panasonic, this is an opportunity to apply its accumulated battery cell manufacturing expertise to a new, rapidly growing market — rather than expanding capacity exclusively for the automotive industry, which in recent years has been growing far more slowly than the computational infrastructure segment for AI.

What is known about the company's plans

• The facility for manufacturing battery cells for data centers will be located in Kansas, USA
• Mass production is planned to launch by fiscal year 2028
• The company is redirecting a significant portion of investments in AI infrastructure toward energy storage
• Panasonic is historically known primarily as one of the largest manufacturers of batteries for electric vehicles
• The plans were discussed by the company's CEO — Panasonic is revealing specific project details gradually

Data centers as a new frontier in the energy race

The explosive growth in computational power needed for training and running large language models has made power supply one of the main limiting factors for further expansion of AI infrastructure. Data centers need not only more electricity, but also reliable energy storage systems: battery storage systems smooth peak loads, provide backup power in case of external grid failures, and allow data center operators to scale up capacity faster without waiting for grid modernization.

This is precisely why battery manufacturers, previously focused almost exclusively on the automotive industry, are increasingly looking at data centers as a new source of demand. For companies like Panasonic, this means business diversification: instead of dependence on the cyclical and increasingly competitive electric vehicle market, there emerges a parallel direction tied to the long-term trend of growing AI computing.

Who else is looking toward data centers

The trend extends beyond a single manufacturer. As the electric vehicle market grows more slowly than previous forecasts, and demand for AI computing power sets records year after year, battery cell suppliers worldwide are reassessing production line priorities. The data center as a customer differs from automakers: it does not need batteries capable of withstanding vibration and impacts on the road, but stability during continuous 24/7 operation and predictable service life over many years of use without replacement are critical. This opens a niche for players willing to adapt existing production capacity to new technical requirements, rather than building it from scratch.

What this means

Panasonic's pivot toward data center batteries is another sign that energy infrastructure is becoming a bottleneck for AI development: component manufacturers, previously working almost exclusively for the automotive industry, are increasingly switching to serving data centers, which need their own electricity reserves to withstand growing AI computing loads. For the industry, this is a signal: investments in AI have long gone beyond model and chip development and are increasingly hitting up against physical infrastructure — from power grids to basic battery cells.