Automakers Accelerate Entry into Energy Storage Amid Slowing EV Growth

Facing slowing growth in electric vehicle (EV) sales, global automakers are accelerating their strategic shift into the energy storage sector. Since 2026, NIO has partnered with LONGi Green Energy to launch energy storage projects, Geely established FlashJuice Battery Company, Volkswagen activated large-scale energy storage facilities, and companies such as Japan’s GS Yuasa, Ford, and Stellantis have also entered the market. This strategic pivot is driven by multiple factors: rising demand for energy storage—particularly fueled by new opportunities from AI development; high technological overlap between EV and energy storage batteries, which reduces costs for production line retrofits and R&D; and, most importantly, the more stable profitability of energy storage businesses—Tesla’s energy segment achieved a gross margin of 31.4% in 2025, contributing 20% of its total revenue. Automakers are expanding across various segments, including residential and grid-scale storage, vehicle-to-grid (V2G) integration, battery swapping, and battery recycling. However, challenges remain: front-of-the-meter markets are highly competitive, while behind-the-meter markets face difficulties in aligning users, grid operators, and regulatory frameworks. The U.S. and China are respectively advancing the industry through policy support and market mechanisms, marking the automotive sector’s transition into a new era of “selling electricity.”