Ford is starting a battery storage business to power data centers and the grid

In a significant strategic shift, Ford is redirecting its focus from producing large electric vehicles to launching a new battery storage business. The automaker announced on Monday that it will not abandon its plans for battery production; instead, it will channel that capacity into developing energy storage solutions. These new battery systems, which will utilize cost-effective lithium iron phosphate (LFP) batteries, are designed to support data centers and enhance the reliability of the electric grid. Ford aims to start shipping these storage systems by 2027, with an ambitious target of achieving 20 gigawatt-hours (GWh) of annual production. To bring this plan to fruition, the company is set to invest approximately $2 billion over the next two years. Ford plans to repurpose its existing manufacturing facilities in Kentucky for this initiative. The company will produce LFP batteries using technology licensed from China's CATL, along with battery energy storage system modules and 20-foot DC container systems. Lisa Drake, Vice President of Technology Platform Programs and EV Systems at Ford, highlighted that the primary market for these new products will be commercial grid customers, with data centers following closely behind. Additionally, Ford anticipates introducing residential storage solutions in the future. Drake noted, "It was clear when we went out to the market that the technology of choice for most of these customers was an LFP prismatic type of container system. Given our existing license to manufacture this technology in the U.S. and our extensive manufacturing experience, this move aligns perfectly with our capabilities." Ford's BlueOval Battery Park in Michigan, which is scheduled to start producing LFP batteries in 2026, remains on track. These batteries will also be intended for Ford's upcoming mid-sized electric truck. However, the Michigan facility will also be adapted to manufacture smaller Amp-hour cells for residential energy storage applications. With this venture, Ford joins the ranks of various automakers exploring the battery storage market. Tesla has been a leader in this space for the past decade, deploying about 10 GWh of battery storage products quarterly, while General Motors also offers both home and commercial battery storage solutions.