Ford and General Motors (GM) are making significant strides into the energy storage sector, aiming to compete with industry leader Tesla. Both U.S. automakers have unveiled plans to expand their operations, capitalizing on the growing demand for battery storage solutions. This strategic shift comes as the electric vehicle (EV) market in the United States faces slower growth than initially expected.
The U.S. EV market is experiencing a slowdown, partly due to policy changes from the previous administration that have diluted previous targets for transitioning away from internal combustion engine (ICE) vehicles. As a result, companies are reassessing their production quotas and exploring alternative avenues. The energy storage market is particularly promising, with a projected value of $14.5 billion by 2027, growing at a compound annual growth rate (CAGR) of 25.2 percent from 2021 to 2027.
Ford’s Expansion into Energy Storage
In December 2023, Ford announced plans to convert its battery production facility in Kentucky into a manufacturing hub for energy storage batteries. This move is designed to meet the increasing energy demands from data centres, utilities, and grid infrastructure. Additionally, Ford will allocate part of its factory space in Marshall, Michigan, for the production of residential storage batteries, in conjunction with its ongoing electric truck battery production.
Ford has committed approximately $10 billion to adapt these facilities and is expected to invest an additional $2 billion to bolster its energy business. The company is shifting its focus towards hybrids, trucks, and energy storage, partly in response to a $19.5 billion write-down related to its EV operations. This strategic pivot underscores Ford’s cautious approach to its EV business while positioning itself for higher returns in the evolving energy market.
GM’s Energy Ventures
Meanwhile, GM is also making significant moves in the energy storage arena. The company established GM Energy several years ago and plans to partner with Redwood Materials in 2025 to utilize EV batteries for energy storage solutions. The automaker reported a fivefold increase in energy storage sales between January and October of the previous year.
One of GM’s flagship products is the “PowerBank,” launched in 2024, which offers battery capacities of 10.6 kilowatt-hours and 17.7 kWh. This device allows EV owners to store and transfer solar energy, providing a reliable home storage option. GM is also marketing charging adapters to enhance its energy product offerings. Wade Sheffer, GM’s Vice President, emphasized the importance of these tools for customers, stating they “help mitigate the impact of power outages, integrate renewable energy options, and unlock additional values.”
The appeal of the energy storage market is growing, especially as utility companies in various states are mandated to invest in battery storage solutions. On the commercial side, businesses are increasingly investing in energy storage as a safeguard against power outages. This creates a diverse market for battery storage, which could prove beneficial for automakers like Ford and GM, who are seeking to diversify their portfolios amid uncertain EV demand.
As the landscape for electric vehicles becomes less predictable, both Ford and GM are adapting their business models. By investing in energy storage operations, they can continue producing vehicles at their U.S. plants while tapping into alternative markets such as utilities and data centre developers. This strategic alignment with the energy storage market not only positions them to respond to current demand but also provides a pathway back to EV battery production when market conditions improve.
The engagement of Ford and GM in the energy storage sector reflects a broader trend among automakers to innovate and diversify, ensuring they remain competitive in an evolving industry.
