EV brakes suddenly, energy storage accelerates rapidly: North American battery factories shift massively toward the AI power consumption track

Due to declining electric vehicle sales in North America, battery manufacturers are transforming factories to produce energy storage batteries in hopes of capitalizing on the growing demand driven by the artificial intelligence (AI) boom.

According to market intelligence firm CRU, ten factories in North America are being converted to produce batteries better suited for energy storage systems. Among these ten factories, seven will primarily serve the energy storage market.

Energy storage systems consist of rows of battery modules managed by software, helping the national grid, households, businesses, and factories cope with fluctuations in wind and solar power generation.

Previously, several battery manufacturers canceled production capacity equivalent to 2 million electric vehicles.

Ford stated that due to a surge in domestic energy storage system demand and limited qualified suppliers, adjustments are being made to its Kentucky plant. General Motors’ battery division head Kurt Kelty recently revealed that the company is considering producing its own energy storage batteries.

Meanwhile, Stellantis and its partner Samsung SDI are converting part of their joint venture plant in Indiana into a production line for energy storage system batteries. This means all three major traditional American automakers could become battery suppliers for AI data centers.

The boom in data center construction in the U.S. is creating new revenue streams for electric vehicle manufacturers and battery companies. Energy storage is critical for AI data centers because they require uninterrupted power supply to prevent outages or voltage fluctuations.

Tesla’s previous earnings report showed that the company’s energy and power storage business revenue grew 27% year-over-year to $12.8 billion in 2025 (up from only $2.8 billion in 2021), while electric vehicle sales revenue declined 10% to $69.5 billion.

Tesla Earnings Report

Although the U.S. federal government has cut electric vehicle consumer tax credits, the “Big and Beautiful Act” passed last year under Trump still preserves production subsidies for battery manufacturers.

As data centers increase electricity demand, the need for energy storage batteries is expected to rise, as developers increasingly deploy batteries to store electricity and smooth output, even as the expansion of solar and wind power slows.

Charlotte McClintock, senior analyst in Rhodium Energy and Climate Department, stated: “Balancing intermittent renewable energy is the key value of energy storage.”

(Source: Cailian Press)