Ford and Normal Motors (GM) have each introduced plans to enterprise into the world of power storage, following within the footsteps of the electrical automobile (EV) large Tesla. The 2 U.S. automakers have large plans for enterprise enlargement, which may drive down EV manufacturing prices, scale back reliance on imports, and increase their portfolios.
The U.S. EV market is rising at a slower tempo than anticipated because the Trump administration waters down goals set by the earlier authorities to limit the sale of inner combustion engine (ICE) autos and incentivise the sale of EVs. This has led a number of firms to cut back their EV manufacturing quotas till demand grows. As an alternative, a number of firms are exploring the event of power storage.
Whereas EV demand could also be decrease than anticipated, there’s a important want for battery storage. Following the deployment of an enormous amount of renewable power capability in recent times, power firms are more and more seeking to set up utility-scale storage programs in tasks to make them extra dependable. The worldwide battery power storage system market is anticipated to attain a price of $14.5 billion by 2027, rising at a CAGR of 25.2 p.c between 2021 and 2027. These power programs use a lot of the identical expertise as EV batteries to supply, making it the right sector for automakers to increase into.
Tesla has lengthy been investing in power storage, having constructed a number of giga-factories – large battery manufacturing vegetation – across the globe. In 2020, Tesla surpassed three gigawatt-hours (GWh) of power storage deployments, primarily because of the recognition of the Megapack. Tesla’s Megapack is a strong, built-in battery system that gives clear, dependable, cost-effective power storage to assist stabilise the grid and forestall outages, based on the corporate.
Tesla Power’s deployed capability elevated by a reported 84 p.c yr on yr within the 12 months from October 2024 to achieve 43.5 GWh. The corporate reported revenues of $3.41 billion from its power storage and technology phase, in comparison with $2.32 billion in operational prices. Seeing Tesla’s profitable enterprise into power storage, a number of automakers have introduced plans to increase into the power storage enterprise.
In December, Ford introduced that it was going to transform its battery manufacturing plant in Kentucky into a producing plant for power storage batteries, because it appears to be like to faucet into the rising energy demand from knowledge centres, utilities, and grid infrastructure. The large automaker additionally plans to make use of a part of its manufacturing unit house in Marshall, Michigan, to supply cells for residential storage, alongside battery manufacturing for its electrical truck. Ford has spent round $10 billion on adapting the 2 vegetation and is anticipated to take a position one other $2 billion in power enterprise enlargement.
Ford introduced plans to shift operations to concentrate on hybrids, vehicles and industrial autos, in addition to power storage, in a bid to attain greater returns. This means that it’s being extra cautious with regards to its EV enterprise, because it took a $19.5 billion write-down in EV-related fees.
In the meantime, GM, which based GM Power a number of years in the past, introduced plans in 2025 to associate with Redwood Supplies to make use of EV batteries for power storage. The automaker reported that gross sales had elevated by fivefold between January and October final yr. One among its longstanding merchandise is the “PowerBank”, which it launched to the market in 2024 and is available in 10.6 kilowatt-hours and 17.7 kWh battery capability variants. The GM PowerBank permits EV house owners a house storage choice to retailer and switch photo voltaic power. The automaker can be promoting charging adapters.
When GM first established its power enterprise two years in the past, the agency’s vp, Wade Sheffer, stated, the instrument ‘offers our prospects extra management over their power use, serving to to mitigate the impression of energy outages, integrating renewable power choices and unlocking further values.”
Increasing into the power storage enterprise is enticing for a number of automakers which may in any other case lose out as a result of gradual tempo of EV gross sales. In a number of states, the utility firms are required to spend money on battery storage, whereas on the industrial facet, firms are investing in power storage as an influence backup for when there are blackouts. This implies that there’s a massive, numerous marketplace for battery storage. Sticking with the battery enterprise additionally supplies automakers with the chance to pivot again to EV battery manufacturing when wanted.
Because the EV demand outlook within the U.S. seems much less sure than it as soon as appeared to, a number of automakers are switching up their enterprise mannequin and venturing into different sectors to increase their attain. Each Ford and GM have adopted in Tesla’s footsteps by investing closely in power storage operations over the past yr. This may permit the automakers to proceed manufacturing at their U.S. EV vegetation whereas interesting to various markets, corresponding to utilities and knowledge centre builders.
By Felicity Bradstock for Oilprice.com
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