EnerSys Selects Greenville, South Carolina to Advance its Lithium Battery Production in the United States

Rhea-AI Summary

EnerSys, a global leader in stored energy solutions, selects Greenville, SC to build a lithium-ion cell gigafactory, investing $500 million to create 500 jobs. The factory will produce lithium-ion cells for various applications, with a production capacity of 4 GWh per year.

Insights

Economist

The establishment of a lithium-ion cell gigafactory by EnerSys in Greenville, South Carolina, represents a significant economic development event with substantial implications for the regional and national economy. The proposed $500 million investment and the creation of 500 new jobs could have a multiplier effect, stimulating local economic growth through increased employment and the subsequent rise in consumer spending. Furthermore, the gigafactory aligns with the broader macroeconomic trend of reshoring manufacturing capabilities, especially in critical and high-tech industries such as battery production, which is pivotal for the clean energy transition.

From an economic standpoint, the collaboration between EnerSys and local government entities, leveraging a $200 million incentive package, underscores the role of public-private partnerships in fostering industrial development. The incentives, which include tax benefits from the Inflation Reduction Act, could serve as a catalyst for additional investments in the area, potentially attracting suppliers and related businesses to the region, thus reinforcing Greenville's position as a high-tech industrial hub.

Market Research Analyst

The strategic decision by EnerSys to invest in a lithium-ion cell gigafactory reflects the growing demand for domestic sources of battery production, driven by both commercial and defense sectors. As industries increasingly seek to mitigate supply chain risks by sourcing critical components closer to manufacturing and end-use markets, EnerSys's move could provide it with a competitive advantage. By optimizing cell sizing and manufacturing capabilities, the company is poised to meet specific customer requirements that prioritize domestic production.

Moreover, the gigafactory's intended production capacity of four gigawatt hours per year positions EnerSys to become a significant player in the energy storage market. The ability to produce various form factors of lithium-ion cells indicates a flexible manufacturing approach, which is crucial in addressing the diverse needs of commercial, industrial and defense applications. This flexibility, coupled with the anticipated high-tech manufacturing facility, suggests that EnerSys is investing not only in capacity expansion but also in technological innovation to maintain its market leadership.

Energy Sector Analyst

The construction of a new lithium-ion cell gigafactory by EnerSys is a strategic move that aligns with the global push towards clean energy and electrification. The investment in battery production capabilities is a direct response to the increasing demand for energy storage solutions, which are essential for the integration of renewable energy sources into the grid and the expansion of the electric vehicle (EV) market. By establishing a domestic gigafactory, EnerSys is positioning itself to capitalize on the growing need for reliable and high-capacity batteries.

The involvement in this venture also highlights the impact of legislative measures such as the Inflation Reduction Act on the energy sector. The Act's tax benefits for clean energy investments are likely to accelerate the development of such projects, making them more financially viable and attractive to investors. EnerSys's proactive approach in leveraging these benefits demonstrates an understanding of the regulatory environment and its influence on the energy storage industry's growth trajectory.

READING, Pa.--(BUSINESS WIRE)-- EnerSys (NYSE: ENS), the global leader in stored energy solutions for industrial applications, has announced that it has selected Greenville, South Carolina to develop a lithium-ion cell gigafactory to advance battery production in the United States. This new factory represents a long-term opportunity that will enable growth and allow EnerSys to optimize cell sizing in battery solutions for its customers, providing independence from non-domestic cell suppliers.

EnerSys has applied for a comprehensive incentive package through South Carolina and Greenville County valued at approximately $200 million, which includes a combination of short-term and long-term incentives. The Company intends to use a portion of these proceeds, along with the Inflation Reduction Act (IRA) IRC 45X tax benefits and potential additional federal funding, to make a $500 million investment with the potential to create 500 high-quality new jobs.

EnerSys is evaluating the development of a 500,000 square foot state-of the-art manufacturing facility on approximately 140 acres in the Augusta Grove business park in Greenville. The operation, which would be the company’s second in South Carolina, would manufacture various form factors of lithium-ion cells for commercial, industrial and defense applications, with a production capacity of four gigawatt hours (GWh) per year.

“We recognize Greenville as an emerging hub for high-tech companies with an attractive talent pool in a thriving community. EnerSys is accelerating the global clean energy transition by significantly expanding our production of lithium-ion batteries across a broad range of end markets and applications. With the support of South Carolina and Greenville County this factory will help us meet our customers’ needs, including those with specific manufacturing requirements for domestic sourced batteries,” said EnerSys President & CEO David M. Shaffer.

“Congratulations to EnerSys and Greenville County on a partnership that brings new opportunities to South Carolina. The Upstate is set for significant transformation with an extraordinary $500 million investment, accompanied by the creation of 500 new jobs. This investment will shape the region's future, fostering sustained prosperity for South Carolina in the years ahead,” said Gov. Henry McMaster.

“We are pleased that EnerSys chose South Carolina to increase its statewide presence and host such a large operation. Our pro-business climate and prepared workforce make it possible for companies to start, grow and thrive in a place they enjoy calling home,” said Secretary of Commerce Harry M. Lightsey III.

“Greenville County is proud to welcome EnerSys to South Carolina’s Upstate. Although growing, this community maintains a reputation for serving and helping one another. We look forward to including EnerSys and its team members in our Greenville family as we evolve into a long-lasting and successful partnership,” said Chairman of the House of Representatives Ways and Means Committee Bruce Bannister.

“Greenville welcomes EnerSys to our county and is grateful to its team for selecting our community to expand its technological capabilities. The company’s investment is a testament to Greenville’s diverse and robust manufacturing environment and highly skilled workforce,” said Greenville County Council Chairman Dan Tripp.

This latest development comes after EnerSys announced on June 14, 2023, that it had entered into a non-binding Memorandum of Understanding (MOU) with Verkor SAS, a European leader in battery technology, to explore the development of a lithium battery gigafactory in the United States.

The Company is targeting construction to begin in early 2025 and operations to be online in late 2027.

The transaction, among other things, is subject to customary closing conditions, final Board approval, regulatory and incentive approvals.

About EnerSys

EnerSys is the global leader in stored energy solutions for industrial applications and designs, manufactures, and distributes energy systems solutions and motive power batteries, specialty batteries, battery chargers, power equipment, battery accessories and outdoor equipment enclosure solutions to customers worldwide. The company goes to market through four lines of business: Energy Systems, Motive Power, Specialty and New Ventures. Energy Systems, which combine power conversion, power distribution, energy storage, and enclosures, are used in the telecommunication, broadband and utility industries, uninterruptible power supplies, and numerous applications requiring stored energy solutions. Motive power batteries and chargers are utilized in electric forklift trucks and other industrial electric powered vehicles. Specialty batteries are used in aerospace and defense applications, large over-the-road trucks, premium automotive, medical and security systems applications. New Ventures provides energy storage and management systems for various applications including demand charge reduction, utility back-up power, and dynamic fast charging for electric vehicles. EnerSys also provides aftermarket and customer support services to its customers in over 100 countries through its sales and manufacturing locations around the world. To learn more about EnerSys please visit https://www.enersys.com/en/

Sustainability

Sustainability at EnerSys is about more than just the benefits and impacts of our products. Our commitment to sustainability encompasses many important environmental, social and governance issues. Sustainability is a fundamental part of how we manage our own operations. Minimizing our environmental footprint is a priority. Sustainability is our commitment to our employees, our customers and the communities we serve. Our products facilitate positive environmental, social and economic impacts around the world. To learn more visit: www.enersys.com/en/about-us/sustainability.

Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that are not historical facts, including statements identified by words such as “believe,” “plan,” “seek,” “expect,” “intend,” “estimate,” “anticipate,” “will,” and similar expressions. All statements addressing operating performance, events or developments that EnerSys expects or anticipates will occur in the future, including statements relating to the level of investment, the number of jobs created, the likelihood of obtaining or satisfying the remaining conditions to completing the investment and gigafactory, and the benefits from developing and operating such gigafactory, are forward-looking statements. The forward-looking statements are based on management’s current views and assumptions regarding future events and operating performance and are inherently subject to risks and uncertainties. The statements in this press release are made as of the date of this press release. EnerSys does not undertake any obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release.

The foregoing factors, among others, could cause actual results to differ materially from those described in these forward-looking statements. For a list of other factors which could affect EnerSys’ results, including earnings estimates, see EnerSys’ filings with the Securities and Exchange Commission, including “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations,” and “Forward-Looking Statements,” set forth in EnerSys’ Annual Report on Form 10-K for the fiscal year ended March 31, 2023. No undue reliance should be placed on any forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240214366072/en/

Lisa Hartman

Vice President, Investor Relations and Corporate Communications

EnerSys

610-236-4040

E-mail: investorrelations@enersys.com

Source: EnerSys

FAQ

What is EnerSys planning to develop in Greenville, SC?

EnerSys is planning to develop a lithium-ion cell gigafactory in Greenville, SC.

How much is EnerSys investing in the new facility?

EnerSys is investing $500 million in the new facility.

How many jobs will the new facility create?

The new facility is expected to create 500 high-quality new jobs.

What is the production capacity of the new facility?

The new facility will have a production capacity of four gigawatt hours (GWh) per year.

When is EnerSys targeting to begin construction of the new facility?

EnerSys is targeting to begin construction of the new facility in early 2025.