The biggest U.S. legacy automakers look to turn the losses from their underutilized electric vehicle battery capacity into a new profitable business to seize the soaring demand for battery storage energy systems.
GM and Ford, which, due to poor demand, have written down billions of U.S. dollars of investments in the EV expansion push, are now pivoting to the energy storage business to meet the spike in demand for battery energy storage from data centers and infrastructure to support the electric grid.
The underutilized electric vehicle battery capacity, which cost Ford a massive $19.5 billion write-down and GM cumulative $10.9 billion charges as they scaled back their electric vehicle businesses, is now being put to use for battery energy storage systems (BESS).
Two of Detroit’s Big Three automakers are now competing in offering battery energy storage, too.
At the end of 2025, Ford launched a BESS business as it reshuffled its EV strategy to offer only the most competitive EV models and expand customer choice with additional hybrid and gasoline vehicles.
To scale up its battery energy storage business, Ford is repurposing existing U.S. battery manufacturing capacity in Glendale, Kentucky.
“This strategic initiative will leverage currently underutilized electric vehicle battery capacity to create a new, diversified and profitable revenue stream for Ford. The company also plans to invest roughly $2 billion in the next two years to scale the business,” the auto giant said.
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Ford currently plans to deploy at least 20 GWh of battery storage annually by late 2027.
Ford Energy, the new wholly-owned subsidiary of Ford Motor Company, will provide United States-assembled BESS for utilities, data centers, and large industrial and commercial customers in the United States.
Ford Energy aims to fill the gap in the U.S. energy storage market created by the convergence of data center growth, renewable energy integration, and grid resilience requirements, it said.
In May, Ford Energy announced a five-year framework agreement with EDF power solutions North America, under which EDF power solutions will have the ability to procure up to 4 gigawatt-hours of DC Block BESS annually, representing a total potential volume of up to 20 GWh over the term of the agreement.
“We are delivering the kind of predictable quality and long-term operational confidence that grid operators and large-scale developers require,” said Lisa Drake, president, Ford Energy.
GM has also launched an energy storage business and vehicle-to-grid technology offerings.
“To fix a power grid stressed by power-hungry AI data centers, we are also partnering with Peak Energy to develop and deploy built-for-purpose sodium ion chemistry for grid-scale storage systems,” the automaker said in June.
Even before the launch of the battery storage business, GM had provided repurposed second-life battery packs to help power the largest microgrid in North America at Redwood Materials’ installation in Sparks, Nevada. GM says it is now the first automaker working with Redwood Materials to create true circularity across the entire battery lifecycle.
After the disappointment with the EV manufacturing business amid crumbling demand in the United States, GM and Ford vie to capture the soaring energy storage market.
Earlier this month, the U.S. Energy Storage Market Outlook Q3 2026 by the Solar Energy Industries Association (SEIA) and Benchmark Mineral Intelligence showed that the U.S. installed a record-high energy storage capacity in the second quarter of the year as grid operators and utilities turned to storage to boost grid reliability and meet rising power demand.
The industry installed 20.2 gigawatt-hours (GWh) of new capacity in the second quarter of the year, making it the largest quarter for installations on record and bringing total installations in the first half of 2026 to 30.8 GWh, according to the report.
Battery energy storage supplied more electricity to the grid in the first eight months of 2026 than in all of 2025, the report showed.
Utility-scale battery storage capacity in the United States has jumped over the last three years, with an annual average growth rate of 70%, the U.S. Energy Information Administration (EIA) said last month.
By Tsvetana Paraskova for Oilprice.com
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