Phinergy

Phinergy Prepares for Mass Production of Aluminum-Air Backup Generators

Posted on by Techtime

By Yohai Schwiger

Shares of Phinergy rose about 8% on the Tel Aviv Stock Exchange today (as of 1:00 p.m.) after the company announced the signing of a strategic memorandum of understanding with a U.S.-based global manufacturing and assembly company, paving the way for mass production of its aluminum-air backup power systems for data centers.

While Phinergy did not disclose the identity of its manufacturing partner, it said the company generates billions of dollars in annual revenue and ranks among the world’s leading providers of advanced manufacturing and supply chain services. Under the agreement, Phinergy plans to begin production at a capacity of approximately 300 megawatts per year—equivalent, according to the company, to roughly $300 million in annual sales—before expanding to multiple gigawatts annually.

Phinergy develops aluminum-air generators designed to replace diesel generators as backup power systems for data centers and other critical infrastructure. The technology generates electricity through an electrochemical reaction between aluminum plates and oxygen from the air, eliminating on-site combustion and emissions. According to the company, the systems can provide backup power for several days, with operating time extended simply by replacing the aluminum plates.

Under the agreement, Phinergy will continue manufacturing its proprietary core components, which contain the company’s key intellectual property, while the U.S. partner will be responsible for final system assembly during high-volume production. The model mirrors the manufacturing strategy adopted by many hardware companies, enabling rapid production scaling without the need to build large, capital-intensive manufacturing facilities.

Although the company has not identified its partner, its description suggests it could be one of the world’s major contract manufacturers, such as Jabil, Flex, or Sanmina, all of which specialize in producing complex systems for the data center, energy, and electronics industries.

The announcement aligns with Phinergy’s broader strategic shift toward the rapidly growing data center market, fueled by the accelerating adoption of artificial intelligence. Last year, the company’s aluminum-air technology was selected to participate in a validation project led by the Net Zero Innovation Hub consortium, whose members include Google and Microsoft, to evaluate next-generation backup power solutions for data centers.

Should the validation program lead to commercial deployments, manufacturing capacity is expected to become a decisive competitive advantage. The new memorandum of understanding is intended to address precisely that challenge—not only proving that the technology works, but demonstrating that it can be manufactured at the scale of hundreds of megawatts, and eventually multiple gigawatts per year, as required by the world’s largest data center operators.

Phinergy Stock Surges 180% Amid Pivot to U.S. Data Center Market

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Phinergy’s stock surged by 180% over the past month on the Tel Aviv Stock Exchange, driven by a new business strategy that shifts the company’s focus to the data center market—especially in the U.S., where investment in the sector is skyrocketing into the trillions of dollars. Phinergy has developed a clean, zero-emission power generation technology based on a reaction between aluminum and air. In recent years, it operated primarily in the electric vehicle and telecom tower backup markets. In early July, as part of a fundraising effort, the company presented a new strategy to investors: supplying clean backup systems to data centers to ensure uninterrupted power during grid outages—an alternative to diesel-based generators.

According to its investor presentation, Phinergy is currently in talks with a major cloud provider and is seeking to expand discussions with additional industry players. The company now has two primary partners supporting its new strategy. The first is Rosendin Electric, a major U.S.-based electrical infrastructure contractor with annual revenues of approximately $3 billion. Rosendin has a strong presence in the data center market and is reportedly involved in about 75% of new construction projects. As part of the partnership, Rosendin will offer Phinergy’s clean backup system to data center clients and provide engineering support to help scale the system’s capacity to megawatt levels—critical for meeting the demands of this high-performance market.

Phinergy has identified the U.S. as its key target market and plans to establish a subsidiary and manufacturing operations on American soil. This will help the company avoid import tariffs and forge partnerships with local stakeholders. Estimates suggest that by 2030, the U.S. will see between $2 trillion and $2.5 trillion invested in new data center projects. Amid this construction boom, there is growing demand for innovative clean energy solutions to power the energy-hungry infrastructure.

Backup Systems: A Billion-Dollar Market

Power backup systems are a critical component in every data center, designed to ensure uninterrupted power in the event of outages, failures, or grid overloads. A typical modern data center includes backup layers combining batteries (UPS – Uninterruptible Power Supply) for immediate response, and diesel or gas generators that kick in after a few seconds to maintain long-term operations. In recent years, advanced technologies have gained traction—such as Battery Energy Storage Systems (BESS), fuel cell-based solutions, and integration with renewable energy sources.

These systems are essential: even brief outages can disrupt critical services, cause data loss, and result in major financial and reputational damage. Market estimates suggest the data center backup power market is worth $7–10 billion annually, with rapid growth driven by rising demand for high availability in cloud infrastructure and AI workloads.

A Clean Alternative: Aluminum-Air Power Technology

Phinergy’s core technology is based on aluminum-air energy systems, which generate electricity through a chemical reaction between aluminum, water, and oxygen from the ambient air. This process produces zero carbon emissions, offering a clean and sustainable alternative to conventional fossil fuel-based power sources. The system is lightweight, compact, and scalable, making it particularly suitable for backup power in data centers, where reliability and environmental standards are increasingly critical. Unlike traditional batteries, Phinergy’s solution does not require frequent recharging and can deliver extended backup durations with minimal environmental impact.

Earlier this week, Phinergy announced a second major partnership aimed at strengthening its foothold with major cloud players. According to a filing with the Tel Aviv Stock Exchange, the company will conduct a funded pilot with the NetZero consortium, which will install Phinergy’s system at one of its data centers to validate the technology and promote it as an alternative solution in the sector. Following the announcement, Phinergy’s stock jumped an additional 36%.

Net Zero Innovation Hub for Data Centers is a global European-led consortium that brings together leading players in the data center industry to advance carbon reduction and net-zero goals. Members include companies such as Google, Microsoft, Schneider Electric, Danfoss, Vertiv, and Data4. The consortium focuses on developing renewable backup power sources, tools for heat reuse measurement, and unified standards for environmental transparency. It also fosters collaboration with regulatory, industrial, and academic bodies to help shape the data center of the future—efficient, sustainable, and carbon-neutral.

Tata and Phinergy to power EV with metal-air Batteries

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Following a year of development, the israeli Phinergy and the Indian car manufacturer Tata Motors, will present – at the upcoming Auto Expo Imdia – a prototype of the world-first aluminum-air battery powered vehicle. Tata Motors is a subsidiary of Tata Group, an Indian multinational conglomerate headquartered in Mumbai. It produces a wide variety of vehicles, including sedans, trucks, Vans, buses, military vehicles, and logistic equipment. During 2021, Tata Motors manufactured almost one million vehicles, and its annual revenue totalled $45 billion.  

The prototype is based on the Tata Tiago electric model that Tata launched few months ago. In the new prototype, the conventional lithium batteries are replaced by Phinergy’s alternative batteries, in which the electrical energy that drive the engine is a product of reaction between aluminum, air, and water. These batteries are lighter, less polluted, are charged within few minutes and provide the greater driving range. Also, unlike lithium, aluminum is abundant in India, which makes this solution much more suitable for the Indian market. 

Tata Motors and Phinergy have not yet revealed what will be the new car’s range, but the  new batteries’ potential might be implied from another cooperation of Phinergy in the Indian market. Together with Mahindra Electric, Phinergy integrated its battery in an electric  three-wheeler (Rickshaw), which increased the driving range from 80 miles to 300 miles in a single charging.  

Alongside its cooperations with local manufacturers, Phinergy is preparing the required infrastructure to support the marketing of its air-aluminum batteries. Last year, the Israeli company founded a subsidiary with the local energy giant Indian Oil, which operates around 30,000 gas stations throughout India. These stations are intended to be used also for charging batteries.