The Japanese group plans to mass produce battery cells for data centers in Kansas by fiscal 2028, redirecting a large portion of its AI infrastructure investment toward storage.
Companies that made batteries for electric cars are discovering a new, hungrier customer: the data center.
Panasonic plans to localize production of battery cells for data centers in the United States, the chief executive of its power unit said, building the cells at a plant in Kansas rather than shipping them there, as the Japanese group pursues a market that barely existed a few years ago.
Mass production at the Kansas site is scheduled for the fiscal year ending March 2029, which Panasonic counts as fiscal 2028.
The plant gives the company a domestic base to directly supply US data center operators, a significant advantage at a time when tariffs, supply chain anxiety and the enormous speed of AI development have made domestic manufacturing a competitive asset rather than a cost to be minimized.
The money behind the measure is substantial. Panasonic is directing about 350 billion yen, roughly $2.18 billion, of a previously announced 500 billion yen AI infrastructure investment over fiscal years 2026 to 2028 to its Energy unit, the division that also supplies Tesla, with the remaining 150 billion yen going to its Industry segment.
The split indicates where the company believes the growth is: The battery business that grew around electric vehicles is being restructured to power the server room.
Ambition is sized accordingly. Panasonic Energy CEO Kazuo Tadanobu described the unit’s 950 billion yen sales target for data center-related energy storage in fiscal 2028 as a “minimum commitment and the business aims to drive sales above 1 trillion yen.
Whether a goal is framed as a floor rather than a goal is a sign of how quickly the company expects demand to increase.
The logic is based on how modern data centers actually work. Facilities that train and service AI models consume huge, peak loads and cannot tolerate even a flash of outage, making large-scale battery storage essential to smoothing supply, bridging outages, and managing the gap between what the grid can deliver and what racks demand at any given moment. As AI computing grows, attached storage grows with it.
The cells these facilities need also have different specifications than those used in cars, tuned for grid-style duty cycles rather than the range and weight limitations of a vehicle, which is part of the reason why an established battery manufacturer has yet to develop dedicated capacity rather than simply repurpose its existing lines.
That demand is already straining the systems around it. Construction has pushed power grids to the limit, with electricity operators Denmark suspends new connections to China struggling with how to combine clean energy with data center charging, a context that makes on-site storage less of a luxury than a requirement.
Batteries are becoming part of the basic AI system, not an optional extra added on at the end.
Panasonic is not entering an empty field. Chinese battery giants, including CATL, are competing for the same data center storage market, and the competition runs parallel to the broader competition for silicon within those facilities, where Chinese companies are putting pressure on. domestic alternatives to Nvidia at speed.
The power layer of the AI stack is becoming as controversial as the compute layer.
The US plant is one node in a broader network. Panasonic Energy also plans a third plant in Mexico, with mass production also planned for fiscal 2028, giving it capacity in North America on both sides of the border.
The company has not detailed production volumes from the Kansas site or named data center customers it hopes to supply, leaving commercial details to emerge as production approaches.
What is clear is the direction: a battery manufacturer that bet its future on cars is now betting on a second bet: that machines learn to think.
