- Ford shares have climbed 28 percent in just the past two weeks.
- The new Ford Energy unit repurposes idle battery capacity.
- Spare EV lines now build storage for utilities and data centers.
Wall Street has a short memory when the numbers move in the right direction. Ford’s retreat from several of its EV programs may have cost it billions, but it also pushed the company to spin up a new energy-storage subsidiary, and the market has rewarded the pivot handsomely.
The Detroit automaker’s share price has surged 28 percent in the two weeks since Ford Energy was established. The new subsidiary will repurpose production capacity once set aside for electric vehicle battery packs, using it instead to build batteries for energy storage systems destined for power companies, industrial customers, and AI data centers.
Read: Ford Gave Up On Beating China On Batteries And Cut A Deal Instead
What has investors paying attention is Ford’s tie to China’s CATL, the largest battery maker on the planet. Ford licenses CATL technology for the cells it builds in Michigan and Kentucky. The arrangement cuts both ways. Ford gets proven battery tech, and CATL gets a foothold in the US market it has otherwise struggled to enter.
The First Of Many Deals
According to The Wall Street Journal, Ford plans to deploy at least 20 GWh annually for its energy-storage systems. In mid-May, it announced a deal with renewable power developer EDF to provide up to 4 GWh of battery storage annually for five years, totaling 20 GWh. According to James Picariello, head of US autos research at BNP Paribas, Ford needs more deals like this.
“It is a true repurposing of excess battery cell capacity,” he said. “We would need, in theory, five more of those types of awards to all take place in the next 12 or so months for us to reliably, with supreme confidence, say this is how and why and when Ford gets to 20 gigawatt hours of demand.”
Late last year, Ford revealed it was taking a $19.5 billion write-down after scaling back several of its electric vehicle plans, including battery joint ventures with SK On and LG Energy Solution.
