EnerSys, a provider of stored energy solutions for industrial applications, announced a strategic manufacturing realignment to enhance operational efficiency, company officials stated in a press release. As part of this initiative, EnerSys will close its legacy lead-acid battery manufacturing facility in Tijuana, Mexico, and transition most of the production to its existing proprietary advanced Thin Plate Pure Lead (TPPL) plant in Springfield, Missouri, leveraging its investments to expand capacity within its U.S. manufacturing network.
EnerSys’ proprietary TPPL technology delivers greater power density and superior discharge performance compared to legacy valve-regulated lead-acid batteries, noted the release.
EnerSys expects to incur a pre-tax charge of approximately $37 million under this plan when completed, the majority of which is expected to be incurred by the second half of fiscal year 2027, of which $14 million is expected to be a non-cash charge primarily from equipment write-offs. Cash charges of $23 million include severance, decommissioning and cleanup related to the facility. The restructuring is expected to deliver an annual estimated pre-tax benefit of approximately $20 million, beginning in fiscal year 2028, while ensuring continued product availability and customer support.
“The closure of our Tijuana facility and the transition of production to Springfield, Missouri, will enable us to optimize our cost structure, maximize near-term advanced manufacturing production tax benefits, and mitigate future risks associated with potential tariffs while reinforcing our commitment to strengthening domestic industrial capacity and supply chain resilience,” said Shawn O’Connell, president and chief executive officer at EnerSys. “These actions build on the investments we have made to scale our TPPL platform and enable us to better serve data center customers with solutions that deliver higher power density and strong performance for today’s increasingly demanding applications.”
EnerSys states that it remains committed to maintaining service continuity for its customers throughout this transition. The Company will work closely with employees, customers and other stakeholders to ensure a seamless shift in production and supply chain logistics.