Honda pivots EV battery plant to data center storage

Honda has begun producing batteries for energy storage systems at its Ohio factory, marking a strategic pivot from its cancelled electric vehicle program. The plant, originally built in a joint venture with LG Energy Solution to supply cells for three EVs that were scrapped in March, is now shipping batteries to data centers instead of car buyers. The shift follows a $15.7 billion write-down last fiscal year, partly due to restructuring its EV strategy amid weak U.S. demand after the expiration of federal EV tax credits in September Source: TechCrunch; The Next Web.

Market Context

The stationary storage market is booming, with U.S. installations reaching a first-quarter record of 9.7 gigawatt-hours (GWh) in 2026, a 32% increase year-over-year, according to SEIA and Benchmark Minerals. That's enough batteries to build roughly 120,000 EVs Source: The Next Web. Annual installations are projected to reach 110 GWh by 2030, nearly tripling current pace, driven by data center demand and grid stabilization needs Source: TechCrunch; The Next Web.

Industry Moves

Honda is not alone in pivoting: Ford launched a $2B subsidiary, Ford Energy, for grid-scale storage; GM announced three partnerships including sodium-ion battery development; and Tesla, which pioneered the market, reportedly earns 30% gross margins on its Megapack and Powerwall products — about twice its vehicle margin Source: The Next Web; TechCrunch. For Honda, repurposing its Ohio production lines keeps the factory running while the U.S. EV market recovers.