After Struggling With EVs, US Automakers Pivot to Energy

Ford launched Ford Energy, a new subsidiary dedicated to producing battery energy storage systems (BESS) for utilities, industrial customers, and data centers. The company plans to begin deliveries by late 2027, repurposing unused production lines at its Glendale, Kentucky plant, originally intended for EV battery manufacturing. The announcement sparked a 13% stock price surge, the largest single-day gain in years, reflecting investor optimism about the shift. The pivot comes after Ford took a $19.5 billion write-down on its EV programs last year, scrapping several current and next-generation electric vehicles in favor of hybrids. Federal incentives for commercial battery storage projects, combined with reduced EV sales support under recent GOP-led legislation, further incentivized the transition. Ford CEO Jim Farley highlighted battery energy storage as a high-margin opportunity, contrasting with the thin profit margins typical in carmaking. Ford’s strategy leverages its partnership with Chinese battery manufacturer CATL, which provides manufacturing expertise. The company aims to capitalize on growing demand for energy storage solutions while adhering to federal policies promoting domestically produced batteries. General Motors has also shifted focus, collaborating with Redwood Materials and LG Energy Solution to repurpose an EV battery plant in Tennessee for energy storage systems. Stellantis, meanwhile, has pivoted production from its joint venture with Samsung SDI in Kokomo, Indiana, toward energy storage, though reports suggest the company may exit the battery venture amid mounting EV losses. Tesla’s energy storage business, established over a decade ago, remains a leader in the sector. The broader trend reflects automakers’ strategic realignment, moving away from ambitious EV transition timelines toward energy storage as a more viable near-term opportunity.