Honda Motor NYSE:HMC is reportedly repurposing its Ohio battery plant to supply the fast-growing AI data center market after weaker-than-expected electric vehicle demand forced the automaker to rethink its strategy.
According to Nikkei, Honda and South Korea's LG Energy Solution have started producing batteries for energy storage systems used in data centers at the Ohio facility. The plant was originally built under a 2022 joint venture to manufacture lithium-ion batteries for EVs.
However, slowing EV demand led Honda to scale back its electrification plans, including halting development of three U.S.-bound EV models, one of them under the Acura brand. That left the newly completed plant without enough demand for EV batteries.
The move reflects a broader shift across the industry as companies redirect battery capacity toward stationary storage, a market benefiting from surging electricity demand from AI data centers.
Honda plans to begin producing hybrid vehicle batteries at the Ohio plant in 2028 after acquiring the facility's buildings and assets from LG Energy Solution for $2.5 billion. The automaker said it will adjust production between energy storage and hybrid batteries based on market demand.