Yes this is because there isn't enough grid storage yet. Massive amounts of stationary storage need to be produced whether that be pumped hydro or lithium ion battery or some other means of energy storage.

I recently worked out that the UK's installed capacity of pumped hydro is around 28GWh. This is around the worldwide total production of lithium batteries per year circa 2016 (realistically it may have doubled since then).

Personally I don't going into competition with laptops, mobile phones and car battery manufacturers as a viable long term strategy for grid scale storage.

I think your numbers are outdated, that's about the production numbers of Tesla alone, not counting the other manufacturers. And Tesla just announced their plans to move towards 3 TWh/year production rate towards 2030.

Any electric car plugged in is a great buffer for surplus electricity production.

In theory yes, in practice, which electric car charger has a built in 3kw inverter for backfeeding? Have you seen how large a 3kw inverter is? They are also not cheap. Secondly, most homes aren't metered in both directions. What is the ROI of one car plugged into the grid in this system? How much does it depend on how long the vehicle is actually plugged in and whether it is plugged in at useful times.

Taking the number above for installed capacity of pumped hydro. You are looking at nearly half a million cars and homes to match the capacity (assuming 50kwh per vehicle), before considering the plugged in factor.

At say a nice round £1000 to upgrade each home you are already looking at a cool half a billion. Already around the cost of the Dinorwig pumped hydro station before you figure out how to compensate electric car owners for the extra wear on their batteries or the fact that when they leave for work their car is flat because it has been powering your neighbors electric showers.

Yes, in those rather short time periods, energy prices are free. But for those periods, batteries are the better storage solution, as the total amount of "free" energy is rather small. Electrolysis plants would have to run basically 24/7 to be viable. More battery electric cars on the roads also mean a lot of storage for excess electricity. Just use the top 10 to 20 percent of the capacity to absorb production peaks.