Ford Invests $2 Billion in Energy Storage Business Transformation

Ford Motor Company (F.N) announced on Monday that it will transform its idle electric vehicle battery production capacity into grid-scale energy storage business, and will invest about $2 billion over the next two years, marking a significant strategic adjustment for the century-old automaker after setbacks in its electric vehicle transition.

Ford also announced a massive writedown of $19.5 billion in electric vehicle-related assets, terminating the development plans for several pure electric car models, and shifting its strategic focus to hybrid power and energy storage fields.

Capacity Transformation and Goals

Ford plans to convert its Kentucky Glenndale factory, originally built as a battery factory in a joint venture with South Korea's SK On, into a facility for producing large battery energy storage systems (BESS), with each system having a capacity of more than 5 megawatt-hours, using lithium iron phosphate (LFP) prismatic cells, mainly targeting data centers, utilities, and large industrial customers. The Marshall factory in Michigan will also use part of its production capacity for the production of home energy storage systems.

The company plans to achieve an annual deployment target of not less than 20 gigawatt-hours by the end of 2027 at the earliest, with the first batch of products scheduled for delivery starting in 2027.

Following Tesla, Biking AI Energy Demand

Ford's Vice Chairman John Lawler stated that the new business aims to "capitalize on the growing reliable energy storage demand in the field of grid stability and resilience." This move places Ford in the ranks of Tesla and General Motors, who have been in the energy storage race for years — Tesla has deployed about 45 gigawatt-hours of battery energy storage in the past 12 months, while General Motors announced in 2025 a partnership with Redwood Materials to conduct energy storage business.

Morgan Stanley estimates that if Ford's energy storage business progresses smoothly and reaches an annual production capacity of 20 gigawatt-hours, it can bring an additional annual revenue of $4 billion to $5 billion, with a higher profit margin than car manufacturing businesses.

Electric vehicle sales in the United States fell by 27% year-on-year in the first quarter, accounting for only about 6% of new car sales; while during the same period, European all-electric vehicle sales accounted for about 20% of total new car sales. The slowdown in electric vehicle demand has led both Ford and General Motors to accumulate a large amount of excess battery production capacity, making energy storage business a key way out for revitalizing existing investments.

The energy demand driven by AI data centers is growing at the fastest rate in decades, which has pushed the stock prices of energy infrastructure companies such as GE Vernova and Caterpillar to rise significantly. Ford also hopes that its new business will gain similar market recognition.