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Even Honda is pivoting to data centers
Honda has initiated production of batteries for energy storage systems, shifting focus from U.S. EV production amid soft demand. The automaker's pivot follows tax credit cancellations for EVs, leading to the cancellation of three U.S. EV models. The energy storage market is booming, with significant growth expected as Honda aims to participate in the energy transition.
Key points
- Honda began battery production for energy storage systems this week.
- This shift occurs after Honda canceled its EV programs in the U.S. due to soft demand and canceled tax credits.
- The automaker had previously planned to produce EV batteries in Ohio in partnership with LG Energy Solution.
- Honda wrote down $15.7 billion last fiscal year, part of which is attributed to restructuring its EV strategy.
- The stationary storage market is growing at 32% year-over-year, with 9.7 gigawatt-hours installed in Q1.
- Major automakers are pursuing battery production due to profitability; Tesla earns 30% gross margin on its energy products.
Why it matters
- The cancellation of EV tax credits by the GOP has impacted EV sales in the U.S., causing manufacturers to reevaluate their strategies.
- Honda's pivot reflects a broader trend among automobile companies towards energy storage solutions amid fluctuating EV market conditions.
- The rapid growth of the energy storage market is part of the larger shift towards renewable energy and sustainability efforts, a key trend predicted to continue.
Honda's withdrawal from the U.S. EV market signifies the challenges presented by changing incentives and market dynamics, while its venture into energy storage highlights the importance of adapting in a rapidly evolving energy landscape.