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

U.S. automakers are increasingly getting into the energy storage business as they look to move away from electric vehicles and leverage battery factories that cost billions of dollars.

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

Tesla’s has been investing in this field for at least ten years. Other automakers, e.g. ford And GMHe made important statements at a time when uncertainties regarding the near future of electric vehicle sales in 2025 began to increase.

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

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

“If a lot of automakers move in that direction, you end up with oversupply and not enough demand to meet it,” he said. “This could mean vehicle manufacturers find themselves in the same position they are now in terms of electric vehicle demand.”

Renewable energy sources such as solar panels and wind turbines may have an “intermittency problem”; This means they only produce power when the sun is shining or a breeze is blowing, and that may not be when it’s needed. Batteries can fill this gap by collecting and storing electricity for use at another time or selling it back to the grid.

Batteries can also collect energy from the grid when rates are low, such as at night. Energy-hungry businesses can use this storage to reduce electricity costs.

“This is a completely valid way of working,” said Pete Tillotson, senior research analyst at Benchmark Mineral Intelligence. “And this will create a revenue stream for the majority of assets on the grid.”

Ford announced in December that it would transform the Kentucky battery factory it recently built with its partner SK On. Batteries for energy storage. It also plans to set aside some factory space to make cells for residential storage at a factory in Marshall, Michigan.

Ford’s crosstown rival General Motors formed GM Energy a few years ago and then launched a Tesla-like residential solar product called PowerBank in October 2024. Redwood Materials Both old and new EV batteries are used to store energy.

GM Energy said in October: sales increased fivefold We have recorded 30% monthly revenue growth since January. In addition to PowerBank batteries, the division also sells charging adapters and technology for using the vehicle itself as a backup battery at home.

They also have a guaranteed customer base. In some states, utilities are required by law to at least consider deploying energy storage, and California sets energy storage targets.

Batteries in the residential market, such as the Tesla Powerwall or GM PowerBank, can support a rooftop solar panel, act as a backup power source for power outages, or help sell excess power back to the grid. But the relatively high cost of these systems to homeowners could limit demand, Sioshansi said.

Commercial uses vary. Demand from businesses such as data centers is expected to increase. GM and Redwood Materials were quoted energy research department It shows a potential threefold increase in energy demand by 2028 compared to 2023 levels.

Data centers that need a lot of power may see energy storage as a needed solution to this shortage.

Meanwhile, EV sales in the US fell from about 10% of the new car market in the third quarter of 2025 to just under 6% in the following quarter. Ford said the company expects EV sales in 2023 to account for about 45% of new car sales by 2030. Currently, the estimate is between 9% and 18%, Ford spokeswoman Emma Bergg told CNBC.

However, storing energy is a very different business than selling cars. Although batteries share the same basic technology, they are technically slightly different; While vehicle batteries need to be optimized for light weight and compact shape, those for energy storage, for example, do not need to be optimized.

“These are significantly different products,” Sioshansi said. “The customer and how you should market and sell those products will look different compared to what a company modeled after GM is used to doing.”

Ford has no direct experience with energy storage, Tillotson said. However, he added that Ford has experience working with CATL, the world’s largest battery manufacturer, which provides battery technology to the Marshall factory.

The challenge is that these companies will have to compete against established players.

“In this case, you have a relative skills gap of finding the workforce that can produce these highly complex advanced technologies against a competitor that specializes in scale and performance,” Tillotson said. “It’s going to be challenging. That doesn’t mean I don’t think the market can get there in the U.S., but it’s going to take a relatively long time to get there if they can’t find a workforce.”

For companies like Ford, it’s a carrot, a push toward U.S. manufacturing. Tax credit incentives exist for projects in the energy sector that avoid certain countries that are considered “relevant foreign entities.” When it comes to energy storage, that means China, the world’s largest producer of energy storage technology.

“This is the biggest incentive to transition to this technology,” Tillotson said.