READING, PA — EnerSys (NYSE: ENS) is refocusing its planned U.S. lithium-ion battery plant on defense and aerospace applications, narrowing the facility’s mission to supply domestically produced cells for customers requiring secure, U.S.-based manufacturing while backing the project with a revised $150 million federal grant and approximately $200 million in state and local incentives.
The company announced that its board has approved the updated investment plan for the Greenville, South Carolina, facility, which is now expected to require a net investment of about $500 million. The plant will initially have production capacity of roughly one gigawatt-hour and will manufacture lithium-ion cells intended to meet defense requirements for foreign entity of concern (FEOC)-compliant supply chains.
The strategic shift moves the project away from serving broader commercial demand and instead targets aerospace, defense and specialized industrial markets where domestic manufacturing is considered essential. EnerSys expects demand from those sectors to be incremental to its existing business while strengthening U.S. supply chain resilience for defense-critical applications.
The U.S. Department of Energy has awarded EnerSys a revised grant of approximately $150 million, subject to final documentation and customary conditions. In addition, South Carolina and Greenville County have committed an incentive package valued at about $200 million through a combination of short- and long-term incentives.
Chief Executive Officer Shawn O’Connell described the revised strategy as a response to evolving national security requirements while creating opportunities beyond the company’s internal battery needs.
“By dedicating this facility to defense-focused lithium cell development and manufacturing, we will further strengthen a secure, resilient, domestically sourced supply chain aligned with evolving U.S. national security requirements,” O’Connell stated. He added that the approach is intended to generate “incremental revenue opportunities beyond our internal supply needs.”
EnerSys first announced plans for the South Carolina plant in 2023 as part of a broader effort to expand domestic lithium cell manufacturing. Following discussions with the Department of Energy, the company determined the project should focus on the specialized requirements of defense customers.
As part of the revised strategy, EnerSys intends to end its technology relationship with French battery manufacturer Verkor for the project and instead rely on an established technology partnership within its existing aerospace and defense supply network.
Construction is expected to begin during the first half of EnerSys’ fiscal 2028, subject to customary approvals and conditions. The company expects full-scale production to begin about three years after construction starts.
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