EnerSys Announces Strategic Manufacturing Restructuring: Monterrey, Mexico Facility Closure and U.S. Production Expansion
READING, Pa., Apr. 01, 2025 (BUSINESS WIRE)
EnerSys (NYSE: ENS), a global leader in stored energy solutions, today announced a strategic manufacturing realignment to enhance operational efficiency and align with the accelerating market shift toward its proprietary higher performance maintenance-free battery technologies such as Thin Plate Pure Lead (TPPL) and lithium-ion. As part of this initiative, EnerSys will close its flooded lead-acid battery manufacturing facility in Monterrey, Mexico, and transition production to its existing plant in Richmond, Kentucky.
EnerSys expects to incur a pre-tax charge of approximately $20 million under this plan when completed, the majority of which is expected to be recorded in the first half of calendar year 2025, of which $7.6 million is expected to be a non-cash charge from inventory and equipment write-offs. Cash charges of $12.4 million include severance, decommissioning and cleanup related to the facility, contractual releases and legal expenses. In conjunction, EnerSys will invest $4.5 million to expand flooded lead battery production capacity in its Bielsko-Biala, Poland facility, providing incremental capacity in Europe to support any demand surges and redundant capacity for flexibility. The restructuring is expected to deliver an estimated pre-tax benefit of $19 million annually, beginning fiscal year 2027, while ensuring continued product availability and customer support.
“The closure of our Monterrey facility and the transition of production to Richmond, KY will enable us to optimize our cost structure, maximize near-term IRC 45X tax benefits, and mitigate future risks associated with potential tariffs while reinforcing our commitment to strengthen domestic industrial security,” said Shawn O’Connell, Chief Operating Officer at EnerSys, who will assume the role of CEO in May. “It’s also a testament to the success of our maintenance-free conversion journey, which continues to strengthen our position as the market shifts toward higher performance, lower maintenance energy solutions.”
EnerSys 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.