Key Takeaways:
- Honda began producing energy storage batteries at its Ohio plant this month
- The $2.85 billion facility was originally built for EV battery production
- Stationary storage market grew 32% YoY, projected to reach 110 GWh annually by 2030
Back
Honda pivots $2.85B battery plant to data center storage
Honda Motor Co. has begun producing batteries for AI data center energy storage at its Ohio plant, redirecting output from a facility originally built for electric vehicles.
Honda Motor Co. this month started producing batteries for energy storage systems at its Ohio factory, becoming the latest automaker to redirect EV battery capacity to the fast-growing data center power market.
The stationary storage market grew 32% year-over-year, with 9.7 gigawatt-hours installed in the first quarter alone, according to a report from SEIA and Benchmark Minerals. That is enough batteries to build roughly 120,000 EVs.
The Ohio plant, a joint venture with South Korea's LG Energy Solution announced in 2022, was completed in 2025 as Honda planned to produce lithium-ion cells for its next-generation EVs. But after the US revoked federal EV tax credits and demand softened, Honda canceled three EV models for the American market, including one under its Acura brand, and wrote down $15.7 billion last fiscal year. The company bought the facility's buildings and assets from LG Energy for $2.85 billion.
Honda plans to begin producing hybrid vehicle batteries at the same Ohio plant in 2028 and will adjust output between energy storage and hybrid products based on demand. The automaker expects to introduce 15 hybrid models, mainly in North America, by fiscal 2029. For investors, the pivot keeps a $2.85 billion asset productive while the EV market recovers — and taps into a stationary storage market projected to nearly triple to 110 gigawatt-hours annually by the end of the decade.
Automakers Follow the Same Playbook
Honda is not alone in the shift. General Motors changed a production line at its Tennessee battery plant to energy storage output, bringing back previously laid-off workers, and plans to make sodium-ion batteries in Michigan as early as 2028. Ford Motor set up a dedicated energy storage subsidiary in May to supply power companies and data centers, and plans to repurpose a Kentucky EV battery factory previously run with South Korea's SK On after that joint venture ended in December.
Tesla, which has captured the majority of stationary storage sales so far, generates 30% gross margins on its Megapacks and Powerwalls — about twice its margin on vehicles. The profitability of the segment has drawn automakers seeking new revenue streams as EV growth slows.
Many stationary batteries are installed at data centers, where AI workloads are driving surging electricity demand. Others connect to the grid, where falling battery prices have made them viable for stabilizing renewable energy output from wind and solar installations.
Honda currently sources hybrid batteries from a Toyota Motor facility in North America. Moving production in-house at the Ohio plant is expected to lower costs as the company expands its hybrid lineup. The plant's ability to switch between energy storage and hybrid battery output gives Honda flexibility to respond to shifting demand as the pace of vehicle electrification evolves.
This article is for informational purposes only and does not constitute investment advice.
