Automakers Ford and GM jump into energy storage, competing with Tesla

By Finance News On Jan 15, 2026

U.S. automakers are increasingly entering the energy storage business as they pivot away from electric vehicles and try make use of battery factories that cost billions of dollars.

Energy storage uses a lot of the same underlying technology as EV batteries to store power for homes, businesses and even utilities.

Tesla has been investing in this area for at least a decade. Others automakers, such as Ford and GM, made significant announcements in 2025, just as uncertainty about the near future of EV sales began to grow.

Electricity demand is growing after years of relatively flat prices, largely fueled by the rise of data centers, according to the U.S. Energy Information Administration. Electrification — or gas heaters, stoves and other appliances moving to electric ones — is also a factor, said Ramteen Sioshansi, a professor of engineering at Carnegie Mellon University who studies the electricity industry.

But this market is still relatively new, he added, and how much demand there will be in the near future is speculative.

“If a lot of auto manufacturers head in this direction, you end up with a glut of supply and not enough demand to absorb it,” he said. “It could be a move where the vehicle manufacturers essentially find themselves in the same position they are right now with respect to electric vehicle demand.”

Battery power

Renewable energy sources such as solar panels and wind turbines can have an “intermittency problem,” meaning they only generate power when the sun is shining or a breeze is blowing — and that might not be when it’s needed. Batteries can fill the gap by collecting and stockpiling electricity to use at another time or sell it back to the grid.

Batteries can also collect energy from the grid at times when rates are lower, like at night. Energy-hungry businesses can use that storage to cut electricity costs.

“It’s a perfectly valid way of operating,” said Pete Tillotson, senior research analyst at Benchmark Mineral Intelligence. “And it will form a revenue stream for the majority of assets on the grid.”

Automakers

Ford said in December it would convert a Kentucky battery factory it had recently built with partner SK On to make batteries for energy storage. It also plans to devote some factory space to make cells for residential storage at a factory in Marshall, Michigan.

Ford is still using the Marshall plant to make batteries for an upcoming midsize electric truck. It has spent about $10 billion on both the Kentucky and Michigan factories and is spending another $2 billion to grow the energy business, according to the company.

Tesla’s Energy division has been around since 2015, when CEO Elon Musk unveiled the company’s Powerwall and Powerpack batteries. It has become a bright spot for Tesla, as its own EV market sales and share have fallen. Margins in that business are about double those of Tesla’s automotive business, and its revenue is now about 20% of the EV maker’s total.

Fred Closter checks his Tesla Powerwall…