More than just Tesla! Panasonic plans to mass produce data center batteries in the United States by fiscal year 2028, accelerating the rise of AI energy storage business.

On Monday, Panasonic Holdings announced plans to start mass production of battery cells for data centers at its factory in Kansas, USA in the 2028 fiscal year (ending March 2029). The company had previously announced an investment of 500 billion yen in AI infrastructure from 2026 to 2028 fiscal years, with approximately 350 billion yen (approximately 21.8 billion US dollars) allocated to its energy division, which supplies batteries to Tesla, and another 150 billion yen invested in the industrial sector. Panasonic Energy also plans to build a third factory in Mexico, with mass production expected to be achieved in the 2028 fiscal year. Kazuo Tadanobu, CEO of Panasonic Energy, stated that the sales target for energy storage systems for data centers in the 2028 fiscal year is 950 billion yen, which is just a "minimum commitment," and the business will strive to increase sales to over 1 trillion yen. The exponential increase in global demand for AI large model training and inference is reshaping the energy foundation of data centers. The latest data from the International Energy Agency shows that global data center electricity consumption reached approximately 485 billion kilowatt-hours in 2025, accounting for about 1.5% of global electricity consumption, with electricity consumption in AI-dedicated data centers growing by 50% year-on-year, far exceeding the overall data center growth rate of 17%. It is expected that by 2030, global data center electricity consumption will double to around 950 terawatt-hours, with electricity consumption in data centers dedicated to AI large models potentially reaching approximately three times the current levels. With the rapid expansion of computing power, the demand for power stability is essential, leading to unprecedented growth opportunities in the data center energy storage backup power market. Third-party data shows that the global AIDC backup battery market is expected to grow at a compound annual growth rate of up to 80% from 2025 to 2030, with the AIDC and general IDC backup battery market expected to exceed 100 Gigawatt-hours by 2030. The rapid increase in power demand from the expansion of computing power has gradually made energy supply a key factor restricting the development of the AI industry. This structural shift has opened up a new strategic growth frontier for traditional battery giants with a deep foundation in lithium battery manufacturing. Panasonic's "subtraction" and "addition": From automotive batteries to data center energy storage The macro background of Panasonic's strategic shift this time is the escalating competition in the traditional automotive power battery market and the industry reality of slowing global demand growth for Tesla. Faced with this situation, Panasonic Holdings decisively made choices, announcing an investment of 500 billion yen in AI infrastructure from 2026 to 2028 fiscal years, with approximately 350 billion yen allocated to its energy division and another 150 billion yen directed towards the industrial sector. This means that Panasonic is rapidly redirecting a large amount of production resources that were exclusively for Tesla towards the emerging strategic track of data center energy storage. At the 2025 Investor Relations Day, Panasonic Energy Systems outlined the company's new positioning and proposed a vision to become a "provider of data center energy solutions." The company plans to achieve revenues of 800 billion yen in data center energy storage batteries by the 2029 fiscal year, tripling from the 2026 fiscal year, with a return on invested capital (ROIC) exceeding 20%, and revenue matching or even surpassing the company's current core business unit - power batteries. According to the company's plan, Panasonic Energy will start production of data center energy storage battery cells within the 2026 fiscal year by expanding existing production lines and converting original automotive battery production lines. The product line will cover the entire chain of solutions from battery cell development, module design to control software and subsequent maintenance. To ensure supply chain resilience, the company also plans to build a third factory in Mexico by the 2028 fiscal year. At the same time, Panasonic is actively innovating its core energy storage technology and is collaborating with internal group companies to develop the next generation of integrated supercapacitors for AI servers. These products can effectively absorb fluctuations in power loads and respond to the rapid increase in power demand from AI servers. This unit is expected to start production in the 2026 fiscal year. Players flocking: Data center energy storage becomes a must-win battlefield for battery giants The prosperity of the data center energy storage track has attracted leading energy storage companies worldwide to enter the field. Panasonic is not a pioneer in this area, but with its market share of up to 80% in distributed power systems, it still has significant competitive advantages. However, to maintain this position, Panasonic will face fierce competition from multiple directions. Tesla: Energy storage has become the second growth pole, and Shanghai's production capacity is accelerating. Tesla has established energy storage systems Megapack as a core strategic direction after electric vehicles. In February 2025, Tesla's Shanghai energy storage super factory officially started production, with an initial planned capacity of 10,000 units/year and an energy storage capacity of nearly 40GWh, bringing the total annual capacity with the California factory to nearly 80GWh. The first batch of 8 Megapacks has been contracted for use in the Lingang IDC data center. In 2024, Tesla's energy production and energy storage business generated annual revenue exceeding $10 billion, a year-on-year increase of 67%, accounting for over 10% of total revenue for the first time. Tesla expects energy storage installations to increase by at least 50% in 2025. Korean Titans: LG Energy accelerates transformation, Samsung SDI focuses on AI data center specialty products. LG Energy has clearly shifted its strategic focus towards data center energy storage batteries. In June 2025, the company officially began mass production of lithium iron phosphate (LFP) energy storage batteries at its factory in Michigan, USA, and plans to transform some of its electric vehicle production lines into ESS production lines. The company's renovated factory in Chicago is also operational and is used to assemble battery cells into energy storage modules. Samsung SDI unveiled UPS batteries for AI data centers optimized at the 2025 North America Energy Expo. The U8A1 product has a space efficiency 33% higher than existing products. This product has a unique function to stabilize power quality in response to the sharp increase in power demand in AI centers, perfectly meeting the high power stability requirements for AI computing center applications. The company also showcased ESS new products SBB 1.7 and SBB 2.0, which will be produced locally in the US for the first time, emphasizing their "All-American, Proven & Ready" localized competitive advantage.