Honda this week started manufacturing of batteries destined for vitality storage methods, in line with a report from Nikkei Asia. The milestone makes Honda the most recent automobile firm to dive into the red-hot vitality market.
The automaker’s shift towards vitality storage comes three months after Honda canceled its EV programs within the U.S. Batteries for the EVs had been slated to be made at a manufacturing unit in Ohio, which Honda operates underneath a three way partnership with LG Vitality Resolution. Now, these cells are headed to knowledge facilities as a substitute of driveways.
Honda’s pivot comes as demand for EVs within the U.S. stays smooth following the GOP’s cancellation of tax credit, which had been supposed to spur EV and battery manufacturing within the U.S. Gross sales of recent EVs remain down year-over-year, partially as a result of customers pulled ahead their purchases to benefit from the tax credit, which disappeared final September.
That uncertainty led Honda to dramatically shift gears, canceling three EVs that had been destined for the U.S. market. The automaker wrote down $15.7 billion final fiscal 12 months, partially to restructure its EV technique. Its weakening China enterprise, the place EVs have soared, additionally contributed to the write-down.
However regardless of the restructuring, Honda didn’t dissolve its three way partnership with LG Vitality. And like seemingly every other automaker, together with Tesla, Ford, and GM, Honda determined that batteries are a giant enterprise on their very own.
The marketplace for stationary storage has been booming, rising 32% year-over-year, according to a report from SEIA and Benchmark Minerals. Within the first quarter of this 12 months, 9.7 gigawatt-hours of vitality storage methods had been put in. That’s sufficient batteries to construct roughly 120,000 EVs.
The breakneck progress is anticipated to proceed. By the top of the last decade, the report estimates that 110 gigawatt-hours of vitality storage will probably be put in yearly, practically tripling the scale of the market.
It’s been a worthwhile market, too. Tesla, which has claimed nearly all of gross sales to date, rakes in 30% gross profits on its Megapacks and Powerwalls, about twice its margin on automobiles.
Many stationary batteries have been put in at knowledge facilities, however a big chunk of them find yourself related to the grid. As battery costs have fallen, they’ve carved out a large area of interest stabilizing the grid whereas additionally augmenting wind and photo voltaic installations, making them extra predictable producing sources.
Honda might not be positive easy methods to method the EV market within the U.S., but it surely’s clear it desires in on the vitality transition in a single type or one other.
Whenever you buy by hyperlinks in our articles, we may earn a small commission. This doesn’t have an effect on our editorial independence.
