What happened
Global battery manufacturers cancelled production capacity for 2 million electric vehicles to retool factories for stationary storage. Companies redirected capital from automotive cells to grid-scale Battery Energy Storage Systems (BESS). This shift addresses surging data centre power requirements driven by high-performance computing. North American and European producers prioritised BESS production over EV supply chains. This follows CATL’s December 2025 report linking battery growth to AI demand and ASML’s January 2026 forecast of increased sales.
Why it matters
Automotive procurement teams face increased supply risk because manufacturers prioritised stationary storage over vehicle cells. Data centre architects gain reliable power backup for high-density racks. This reallocation accelerates an infrastructure pivot to AI, mirroring recent shifts by US Bitcoin miners and Bitfarms. Therefore, EV production timelines may extend while AI infrastructure scaling stabilises. Resulting competition for lithium-ion cells locks in higher costs for transport applications because energy storage demand dominates the market.
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