Data Center Power Demand Spurred Battery Production
Rising global energy storage needs from 12,259 data centers accelerated the production of lithium-ion batteries.
Updated on Sept. 30, 2026 in Data Centers
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Global lithium-ion battery production reached 2.3 terawatt-hours in 2025, driven by the expanding power requirements of the world's 12,259 data centers. This surge in capacity highlights the critical role energy storage systems now play in supporting artificial intelligence and cloud computing infrastructure.
Why it matters
Existing power grids struggle to meet the intense, uninterrupted electricity demands of modern data centers, forcing the industry to rely on localized storage. This shift established energy storage systems as the second-largest driver of global growth for the battery manufacturing sector.
Energy storage system batteries now account for 20% of global battery production capacity, with lithium iron phosphate batteries—a chemistry chosen for high thermal stability—comprising 65% of the total output in 2025.
The players
United States
The national market that hosts 40% of the world's 12,259 data centers.
China
The central manufacturing hub responsible for 86% of global battery production.
The details
Data centers utilize battery energy storage systems to ensure operational continuity when connecting to public power grids, which often lack the capacity or speed to support new facility loads. Lithium iron phosphate (LFP) batteries provide a stable chemical composition that resists thermal runaway, making them the preferred technology for large-scale data center deployment. With 86% of global battery manufacturing occurring in China, the concentration of production reflects a highly centralized supply chain powering dispersed global compute hubs.
Timeline
2023: Global lithium-ion battery production totaled 1.05 terawatt-hours.
2024: Global production grew to 1.6 terawatt-hours.
2025: Production reached 2.3 terawatt-hours, with lithium iron phosphate making up 65% of the total.
End of September 2026: The total number of worldwide data centers reached 12,259.
The Tech Race
The reliance on energy storage systems follows the historical growth trajectory of global lithium-ion battery production, which has more than doubled since 2023. As data centers continue to scale, the race to secure domestic battery supply chains remains the central constraint for high-density compute facilities.
As data centers command a larger share of battery production, industries reliant on these components may face increased competition for supply and potential price fluctuations. Facility operators and grid planners must now account for battery storage as a standard prerequisite for maintaining uptime in regions with constrained power infrastructure.
The takeaway
The massive scaling of data center infrastructure is inextricably tied to the production capacity of lithium-based storage systems. Observers should track shifts in lithium iron phosphate manufacturing costs, as these figures will determine the future economic viability of localized backup for global AI clusters.
Further reading
For more on the infrastructure supporting cloud computing, explore the Data Centers section.
Source note: This article includes information reported by Azertag.
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