EnerSys Announces Strategic Manufacturing Restructuring: Monterrey, Mexico Facility Closure and U.S. Production Expansion
EnerSys, a global leader in stored energy solutions, has announced a strategic realignment of its manufacturing operations aimed at enhancing efficiency and aligning with the increasing market demand for its proprietary high-performance, maintenance-free battery technologies. This move is part of the company’s broader initiative to streamline its manufacturing footprint while reinforcing its position as an industry leader in advanced energy solutions such as Thin Plate Pure Lead (TPPL) and lithium-ion technologies.
Manufacturing Restructuring: Key Changes and Investments
As part of this strategic initiative, EnerSys will permanently close its flooded lead-acid battery manufacturing facility located in Monterrey, Mexico. The production activities from this facility will be transitioned to the company’s existing plant in Richmond, Kentucky. This transition is expected to provide several operational and financial benefits, including cost optimization, tax advantages, and risk mitigation against potential tariffs, while ensuring a more centralized and secure domestic supply chain.
EnerSys anticipates incurring a total pre-tax charge of approximately $20 million related to this restructuring plan. The majority of these costs are expected to be recorded in the first half of calendar year 2025. Of this amount, $7.6 million will be a non-cash charge attributed to inventory and equipment write-offs. Meanwhile, cash-related expenses totaling $12.4 million will cover severance packages for affected employees, facility decommissioning and cleanup costs, contractual settlements, and legal expenses.
In parallel with the Monterrey facility closure, EnerSys will invest $4.5 million in its Bielsko-Biala, Poland manufacturing plant to expand its flooded lead-acid battery production capacity. This investment will enhance the company’s ability to meet increased demand in the European market while also ensuring redundant production capacity, thereby adding flexibility to the company’s global supply chain.
Once fully implemented, the restructuring is projected to deliver an estimated annual pre-tax benefit of $19 million, beginning in fiscal year 2027. The restructuring also aligns with EnerSys’ long-term strategy of focusing on high-growth, high-margin product lines and strengthening its position in the evolving stored energy market.
Leadership Perspective on the Transition
Shawn O’Connell, Chief Operating Officer of EnerSys and the incoming Chief Executive Officer (effective May 2025), emphasized the strategic importance of this transition in a company statement.
“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 strengthening domestic industrial security,” O’Connell stated. “It also highlights the success of our maintenance-free conversion strategy, which continues to position EnerSys at the forefront as the market shifts toward higher-performance, lower-maintenance energy solutions.”
Commitment to Customers and Employees
EnerSys is committed to maintaining service continuity for its customers throughout the transition process. The company will work closely with employees, customers, suppliers, and other stakeholders to ensure a seamless shift in production and supply chain logistics.
Employees affected by the Monterrey facility closure will be provided with severance packages and support to assist in their transition. Additionally, EnerSys will coordinate with suppliers and partners to ensure minimal disruption in order fulfillment and customer support during the restructuring period.
About EnerSys
EnerSys is a global leader in stored energy solutions for industrial applications. The company designs, manufactures, and distributes a wide range of energy systems, motive power batteries, specialty batteries, battery chargers, power equipment, and battery accessories. It also provides enclosure solutions for various applications worldwide. EnerSys operates through four primary business segments:
- Energy Systems – Integrates power conversion, power distribution, energy storage, and enclosures for use in telecommunications, broadband, utilities, uninterruptible power supply (UPS) applications, and other industries requiring stored energy solutions.
- Motive Power – Supplies batteries and chargers used in electric forklift trucks and other industrial electric-powered vehicles.
- Specialty – Focuses on aerospace and defense applications, portable power solutions for military personnel, large over-the-road trucks, premium automotive, medical, and security systems.
- New Ventures – Develops energy storage and management systems for diverse applications, including demand charge reduction, utility backup power, and dynamic fast charging for electric vehicles (EVs).
EnerSys maintains a strong global presence, serving customers in over 100 countries through its sales and manufacturing locations.
Commitment to Sustainability
EnerSys places a strong emphasis on sustainability, integrating environmental, social, and governance (ESG) principles into its operations. The company is dedicated to reducing its environmental footprint, improving energy efficiency, and promoting responsible manufacturing practices.
“Sustainability at EnerSys is about more than just the benefits and impacts of our products. Our commitment to sustainability encompasses critical environmental, social, and governance issues that affect our employees, customers, and communities,” the company stated.
EnerSys’ products facilitate positive environmental, social, and economic impacts globally, contributing to cleaner and more efficient energy storage solutions. To learn more about the company’s sustainability initiatives, visit EnerSys Sustainability.
Caution Concerning Forward-Looking Statements
This press release, along with any oral statements made regarding its subject matter, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may include, but are not limited to, projections regarding EnerSys’ earnings estimates, intentions to pay quarterly cash dividends, plans for capital return to stockholders, operational objectives, expectations for cost savings, and anticipated restructuring benefits.
Words such as “believe,” “plan,” “seek,” “expect,” “intend,” “estimate,” “anticipate,” and similar expressions are used to identify forward-looking statements. These statements address operating performance, potential risks, market conditions, and other future developments, including sales growth, earnings per share growth, order intake, backlog, and execution of stock buyback programs.
EnerSys’ forward-looking statements are based on management’s current views and assumptions, but they are inherently subject to significant uncertainties, business risks, and economic fluctuations. These include potential supply chain disruptions, interest rate changes, inflationary pressures, tariff impositions, and geopolitical developments.
While EnerSys believes that its forward-looking statements are based on reasonable assumptions, there is no guarantee of their accuracy. Actual results may differ materially from those projected. For a comprehensive review of potential risk factors affecting the company’s performance, please refer to EnerSys’ filings with the Securities and Exchange Commission (SEC), including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Forward-Looking Statements” sections in the company’s latest Annual Report on Form 10-K.
EnerSys does not undertake any obligation to update or revise forward-looking statements to reflect subsequent events or circumstances beyond the date of this press release.
EnerSys’ strategic manufacturing realignment underscores the company’s commitment to operational efficiency, cost optimization, and long-term market positioning. By shifting production from Monterrey, Mexico, to Richmond, Kentucky, and expanding its European capacity in Poland, EnerSys aims to reinforce its leadership in the stored energy industry while aligning with global market trends toward advanced, maintenance-free battery solutions. The restructuring plan is expected to yield substantial cost benefits and enhance the company’s ability to meet growing customer demands across multiple sectors.
