Is Ford Rewiring Its Future With Investment in Battery Energy Storage?

Ford Motor Company F has unveiled a set of initiatives aimed at strengthening its Ford+ strategy by reallocating capital toward higher-return areas that align with customer demand and support long-term profitable growth. One of the key elements of this shift is the creation of a new battery energy storage business targeting fast-expanding markets, such as data centers and electric-grid infrastructure.

To support this effort, Ford will convert its battery manufacturing facility in Glendale, KY, for the production of advanced energy storage systems to tap into underused EV battery capacity to build a diversified and profitable new revenue stream. The company expects to invest about $2 billion over the next two years to scale operations. The revamped site will produce 5 MWh+ energy storage systems, including LFP prismatic cells, system modules and 20-foot DC container units, core components for utility-scale, industrial and commercial storage applications. 

Leveraging its extensive manufacturing experience and licensed advanced battery technology, Ford aims to bring initial capacity online within 18 months and reach at least 20 GWh of annual deployment by late 2027.

In addition, Ford, SK On, SK Battery America and BlueOval SK have agreed to restructure their joint venture. Under this agreement, Ford will independently own and operate the Kentucky plants, while SK On will fully manage the Tennessee facility.

Moreover, BlueOval Battery Park in Marshall will be used to produce smaller Amp-hour cells for residential energy storage. This plant remains scheduled to begin producing LFP prismatic cells in 2026 to support Ford’s upcoming midsize electric truck, built on the new Universal EV Platform. F carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

How Ford’s Rivals Are Capitalizing on Energy Storage

Tesla's TSLA revenues from the Energy Generation and Storage business is on a robust growth trajectory on the back of the strong reception of its Megapack and Powerwall products. This segment stands out as Tesla's most lucrative, boasting the highest margins. Over the past three years, Tesla’s energy storage deployments have witnessed a CAGR of 180%. With ongoing efforts to ramp up production at the Megapack factory to meet escalating demand, deployments are expected to continue their upward trajectory.

General Motors Company GM is building an energy ecosystem to accelerate EV adoption. In just 18 months, GM Energy has driven strong growth, boosted partnerships and advanced General Motors’ electrification leadership. GM Energy has achieved 30% month-over-month revenue growth, a fivefold increase in sales of charging and energy products since January. Also, GM Energy products are now bundled with seven out of 10 GM EVs, including nearly 100,000 adapters sold to date.

F’s Price Performance, Valuation and Estimates  

Ford has underperformed the Zacks Automotive-Domestic industry in the past six months. Its shares have gained 27.6% compared with the industry’s growth of 52%. 

 
From a valuation perspective, F appears undervalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 0.32, lower than the industry’s 3.63. 

 
The Zacks Consensus Estimate for F’s 2025 EPS has moved down 2 cents in the past 30 days. The Zacks Consensus Estimate for F’s 2026 EPS has fallen 2 cents in the past seven days. 

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This article originally published on Zacks Investment Research (zacks.com).

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