EnerSys (NYSE: ENS) has updated its plans for a lithium cell manufacturing facility in Greenville, South Carolina, narrowing the plant's focus to aerospace, defense, and specialized industrial applications that require a secure U.S.-based supply chain.

The U.S. Department of Energy has awarded EnerSys a revised grant of approximately $150 million, subject to final documentation and customary conditions. The company estimates the total net investment at approximately $500 million. South Carolina and Greenville County have also provided an incentive package valued at approximately $200 million, combining short-term and long-term incentives.

The facility is planned to have an initial production capacity of approximately 1 gigawatt hour. EnerSys intends to fund the project using federal, state, and local grants along with operating cash flow. The company's board of directors has formally approved the investment.

EnerSys first announced plans for a domestic lithium cell manufacturing facility in 2023. As part of the revised strategy, the company said it intends to end its technology relationship with Verkor and will instead rely on an existing partnership within its aerospace and defense supply base.

"By dedicating this facility to defense-focused lithium cell development and manufacturing, we will further strengthen a secure, resilient, domestically sourced supply chain aligned with evolving U.S. national security requirements," said Shawn O'Connell, President and Chief Executive Officer of EnerSys.

Construction is expected to begin in the first half of fiscal year 2028, subject to customary approvals, with full production anticipated approximately three years after construction starts.