Honda has pivoted from electric vehicles to batteries for energy storage systems. The move comes after the U.S. government cancelled tax credits for EVs, leaving sales lagging and forcing Honda to cancel its own EV programs in the U.S.

The shift is part of a broader trend where automakers are seeing potential not just in cars but in stationary battery markets. Data centers have been early adopters, with batteries now installed at a rate that could power roughly 120,000 electric vehicles per quarter.

Despite the drop in EV demand, Honda’s joint venture with LG Energy Solution remains intact. The company sees batteries as a lucrative business in their own right, and the market for stationary storage is booming, expected to grow nearly threefold by the end of the decade.

As battery prices fall, they are becoming essential for grid stability, complementing renewable energy sources like wind and solar. Yet Honda’s uncertain position in the EV market highlights a broader challenge: can businesses adapt fast enough to keep up with changing consumer preferences and government policies?