Even Honda is pivoting to data centers with battery production
Honda has begun producing batteries for data centers rather than electric vehicles, marking one of the clearest pivots in the auto industry this year. The milestone shows that even Honda pivoting data center storage is now part of a broader rush into energy storage, as carmakers chase a market that is growing far faster than U.S. EV sales.
Key Takeaways
- Honda started battery production this week for energy storage systems, with cells headed to data centers instead of driveways.
- The shift follows Honda's cancellation of U.S. EV programs three months ago and a $15.7 billion fiscal-year write-down.
- Stationary storage grew 32% year-over-year, with 9.7 gigawatt-hours installed in Q1 2026 alone.
- Automakers including Tesla, Ford, and GM are treating batteries as a standalone business, not just an EV component.
- Many storage batteries land at data centers, while others stabilize the grid and support wind and solar power.
Why is Honda building batteries for data centers?
According to a report from Nikkei Asia, Honda this week began production of batteries destined for energy storage systems. Those cells were originally slated for electric vehicles built at a factory in Ohio, which the automaker operates through a joint venture with LG Energy Solution.
Instead of powering cars, the batteries will support data centers — part of a stationary storage market that has been expanding rapidly. Honda is now the latest car company to dive into what TechCrunch describes as the red-hot energy market.
What happened to Honda's U.S. EV plans?
Honda's pivot comes roughly three months after it canceled its EV programs in the United States. The automaker scrapped three EVs destined for the U.S. market as demand remained soft following the GOP's cancellation of tax credits that had been intended to spur domestic EV and battery production.
Sales of new EVs remain down year-over-year, partly because consumers pulled purchases forward before the credits disappeared last September. Honda wrote down $15.7 billion last fiscal year to restructure its EV strategy, with its weakening China business — where EVs have soared — also contributing to the charge.
Despite the restructuring, Honda did not dissolve its joint venture with LG Energy Solution. Like Tesla, Ford, and GM, it concluded that batteries are a major business on their own.
How big is the stationary energy storage market?
The numbers explain why even legacy automakers are repositioning. The stationary storage market grew 32% year-over-year, according to a report from SEIA and Benchmark Minerals cited by TechCrunch. In the first quarter of 2026 alone, 9.7 gigawatt-hours of energy storage systems were installed — enough battery capacity to build roughly 120,000 EVs.
Growth is expected to accelerate. By the end of the decade, the same report estimates that 110 gigawatt-hours of energy storage will be installed every year, nearly tripling the size of the market. Tesla, which has claimed the majority of sales so far, earns about 30% gross profits on its Megapacks and Powerwalls — roughly twice its margin on vehicles.
As battery prices have fallen, storage systems have carved out a sizable niche stabilizing the grid while augmenting wind and solar installations. For more on how infrastructure and AI are reshaping tech, see our Future Tech & AI Wonders coverage.
What does Honda's pivot signal for automakers?
Honda may not be sure how to approach the EV market in the U.S., but it is clearly betting on the energy transition in another form. The company kept its LG Energy Solution joint venture running and redirected Ohio-built cells toward storage instead of abandoning the capacity.
Many stationary batteries end up at data centers, while a large share also connects to the grid. That dual demand helps explain why battery output once earmarked for driveways is now finding a home in the broader energy market.