Panasonic Puts $2.18 Billion Into Data Center Batteries, Converts 32 GWh Kansas EV Plant From Q3 2029
- AI Energy Demand Data Centers Energy Storage News
Marin Holt
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- 6 minutes read
- Energy division investment: JP¥350 billion (US$2.18 billion)
- Kansas plant capacity: 32 GWh per year
- Conversion start: Q3 2029
- Data center storage sales target: Nearly JP¥1 trillion (US$6.25 billion) by FY2029
- Total AI infrastructure investment: US$3.12 billion (FY2026-2028)
Panasonic will convert part of its De Soto, Kansas electric vehicle battery cell factory — opened in July 2025 with a planned annual capacity of roughly 32 GWh — to produce batteries for data center applications beginning in Q3 2029, Energy-Storage.news reported. The conversion puts about JP¥350 billion (US$2.18 billion) into Panasonic’s Energy division, part of a broader US$3.12 billion artificial intelligence infrastructure investment covering fiscal 2026 through 2028. The plan was announced in a June 8, 2026 investor presentation in Tokyo.
What Was Announced
Panasonic’s roadmap, detailed at its Investors Day and reported by pv magazine USA, includes a new data-center production line at the Kansas cell plant, completion of second and third battery module factories in Mexico, and a tripling of battery cell production in Japan by fiscal 2029 — including repurposing a vehicle battery line in Osaka for lithium-ion cells and supercapacitors. The product slate targets the specific stress points of AI computing loads: high-capacity capacitor backup units that stabilize voltage through rapid load swings, battery backup units designed for the high-voltage direct current architecture data center developers are adopting, and high-power lithium-ion cells. Panasonic set a target of tripling data center energy storage revenue by fiscal 2029, with sales of nearly JP¥1 trillion (US$6.25 billion) and a return on invested capital above 20% for the energy business.
Why It Matters
Panasonic — the longtime cell supplier to Tesla — is the latest manufacturer redirecting US EV battery capacity toward stationary storage as EV adoption slows and foreign-entity-of-concern restrictions under the One Big Beautiful Bill Act reshape supply chains, according to Energy-Storage.news. Ultium Cells, the General Motors–LG Energy Solution joint venture, is repurposing its Spring Hill, Tennessee plant for lithium iron phosphate storage cells; LG Energy Solution converted Michigan EV lines into roughly 17 GWh of BESS cell capacity; Samsung SDI and SK On have expanded US manufacturing with storage supply agreements; and Ford launched a stationary-storage subsidiary, Ford Energy. Together, Panasonic’s Kansas and Sparks, Nevada plants were slated to produce about 73 GWh of EV cells annually — capacity now partially pointed at a different market. A consultant told Energy-Storage.news last year: “EV demand is going to decrease because of the removal of the EV consumer tax credit. The battery manufacturing capacity from those is now being repurposed to BESS. It’s not cheap to repurpose, but there’s a lot of sunk cost with a gigafactory, so it’s happening.”
Critical Perspective
The De Soto plant opened on July 14, 2025; the decision to repoint part of it was announced less than 11 months later — a measure of how quickly EV demand assumptions collapsed. The conversion itself does not start until Q3 2029, leaving Panasonic three years behind competitors already shipping: LG’s Michigan conversion is complete, and Samsung SDI and SK On have US supply agreements signed today. Panasonic also exited the US residential solar and storage business in 2025, pv magazine USA noted, so this bet concentrates on hyperscale customers — a deep but narrow market whose tripling-revenue target rests on AI demand forecasts, not signed contracts.
Sources
- Energy-Storage.news: Panasonic to convert Kansas EV battery factory for data centre applications
- pv magazine USA: Panasonic to invest $2 billion in data center battery push, ramp up U.S. manufacturing
