Panasonic to invest $2 billion in data center battery push, ramp up US manufacturing

Panasonic will invest JPY 350 billion ($2 billion) to expand its battery manufacturing capacity in a bid to capture expected demand from AI data center growth.

The company announced the plans at its Investors Day event held in Tokyo on June 8, revealing a roadmap to accelerate the development of its domestic and North America-based supply chains.

Plans include introducing a production line for data center applications at the company’s battery cell facility in Kansas, completing a second and third battery module manufacturing site in Mexico, and tripling battery cell production in Japan by fiscal year 2029 – including repurposing the company’s vehicle line in Osaka to produce lithium-ion batteries and supercapacitors.

Panasonic’s power-related ambitions in the data center segment are focused on providing backup and peak shaving capabilities in an increasingly high-voltage environment.

In a presentation to investors, Panasonic said it expects to deliver new products to meet the technical requirements of AI data centers in the future. These include a new generation of capacitor backup unit (CBU) – high-capacity capacitors that can provide bursts of power to stabilize voltage during rapid load fluctuations; battery backup units that are designed for the high-voltage direct current architecture that data center developers are pursuing; and the development of high-power lithium-ion battery cells

Financial targets announced by Panasonic include tripling revenue from energy storage systems for data centers by the 2029 financial year, with a sales target set at nearly JPY 1 trillion ($6.25 billion). The Japanese manufacturer is aiming for an above 20% return on investment capital (ROIC) for its energy solutions business division.

Panasonic’s decision to ramp up battery cell manufacturing for the US data center industry follows the company’s retreat from residential solar and energy storage in the United States. The company announced in 2025 that it would shutter its solar and energy storage business while continuing to invest in EV battery manufacturing in Kansas. Panasonic confirmed it would continue to offer warranty and installation support for existing and ongoing projects.

Panasonic also continues to develop technology for the grid-scale battery energy storage system (BESS) industry. The company announced in March 20026 that it had completed a cybersecurity trial for monitoring grid-scale BESS