Honda/GM/Ford Pivot EV Capacity Toward Energy Storage as Global EV Battery Utilization Sits at Only 30%
Alina Collins
Honda, GM, and Ford are redirecting idle EV battery capacity into energy storage systems, driven by a global EV battery utilization rate of just 30% — while the storage market grows at 28% year-on-year, rewriting capital flows across the battery supply chain.
How bad is the EV battery overcapacity?
S&P Global Mobility estimates 2026 global EV battery factory capacity at roughly 4,480 GWh, against demand of only about 1,360 GWh — a utilization rate of around 30%.
This means → nearly seven-tenths of capacity sits idle, and utilization is not expected to reach even half before the 2030s.
In plain terms = automakers and battery firms built factories betting on an EV boom that hasn't arrived at scale — the plants are ready, but the orders aren't.
Why can energy storage absorb this surplus?
Yano Research Institute estimates 2025 global ESS battery demand at 376 GWh, up 28% year-on-year, roughly doubling to 735 GWh by 2033.
Data centers needing emergency backup power and peak-shaving — storing electricity when demand is low, releasing it at peak — are a core growth driver.
This reflects a widening scissors gap: EV overcapacity on one side, surging storage demand on the other, with capital flowing naturally from the first to the second.
How is Honda pivoting?
Honda's Ohio plant — a joint venture with LG Energy Solution, built specifically for EV batteries and completed in 2025 — lost its demand outlet as EV sales cooled, partly because Trump revoked EV purchase tax credits.
Honda has shelved three U.S.-market EV models (including an Acura), and began producing ESS batteries at the plant in early June.
From 2028, the plant will shift to hybrid batteries, dynamically allocating capacity between storage and hybrids; Honda plans 15 hybrid models by fiscal 2029, focused on North America.
What routes are GM and Ford taking?
GM converted one production line at its Spring Hill, Tennessee battery plant to energy storage and rehired some previously laid-off workers. GM battery chief Kurt Kelty said the plant is expected to begin producing LFP (lithium iron phosphate — a lower-cost, safer battery chemistry) cells for storage in June.
Kelty told Reuters that GM may drop LFP from its long-term EV lineup in favor of LMR (lithium manganese-rich) batteries — similar cost, higher energy density. GM also plans sodium-ion battery production in Michigan as early as 2028, targeting grid-infrastructure safety applications.
Ford launched Ford Energy in May, targeting data centers and utilities with storage systems and committing roughly $2 billion. Ford will repurpose its Kentucky EV battery plant from a joint venture with SK On — dissolved last December due to weak demand.
Are battery suppliers following suit?
Panasonic Energy is redirecting some EV capacity to data-center storage, setting a sales target of ¥800 billion (~$4.94 billion) for the business by fiscal 2028; Reuters reported a higher floor commitment of ¥950 billion.
Panasonic plans to produce data-center batteries at its Kansas plant, switch some domestic Japanese EV lines to storage, and manufacture cells in Tokushima Prefecture with final assembly in Mexico.
Japanese components maker Musashi Seimitsu plans to expand emergency data-center storage output at its Yamanashi plant by over 30× to 6.5 million cells per year by 2027.
Can this pivot actually fill the EV gap?
Storage demand is growing fast, but its scale remains far smaller than the EV capacity gap — 376 GWh of demand against over 3,000 GWh of idle capacity.
This means → energy storage is a real pressure valve, not a cure-all; whether companies can build scale advantage in storage will determine this pivot's success.
In plain terms = the surplus factories have found new work, but the new work can't yet feed this many factories — whoever reaches scale first is the one that survives.
Content is for reference only, not financial advice.