On July 20, 1969, astronauts Neil Armstrong and Buzz Aldrin landed the Lunar Module Eagle on the surface of the moon and radioed to Earth: “Houston, Tranquility Base here. The Eagle has landed.”
What does that have to do with Ford Motor Co.? Everything. You see, much of the equipment used in the Apollo 11 mission to the moon, including the voice transmission back to Houston, came from Ford. It built the Mission Control Center in Houston, Ted Ryan, Ford’s archives and Heritage Brand manager, told the Detroit Free Press.
In 1961, Ford wanted to stretch beyond making cars so it bought electronics manufacturer Philco and transferred Ford’s Aeronutronic Division to the new entity called Philco-Ford, Ryan said. Two years later, Philco-Ford competed against IBM, RCA, Lockheed, Hughes Aircraft and AT&T for the bid to build the Mission Control Center. Philco-Ford was considered an underdog, yet it won the job as prime contractor.
Ford is at it again, venturing outside its lane as a carmaker into a new business — this time making battery energy storage systems — which are large batteries, some as big as shipping containers, used by utility companies and data centers to store energy for use later to stabilize the power grid and to avoid blackouts.
Ford calls the new business Ford Energy and Ford is considered the underdog in this space too. Ford has little experience making such batteries and it will be going up against competitors Tesla, LG Energy Solution and SK On, all of whom have been making the energy storage systems for more than a decade.
Ford is about 18 months away from producing these new energy storage systems in Kentucky and smaller ones in Marshall, Michigan, for residential customers. Some analysts worry it is a risky endeavor with little guarantee of success; others say don’t count Ford out.
CEO Jim Farley remains steadfast that Ford will win, just like it did in helping to send the country to the moon.
“When we come calling to large grid suppliers, energy companies, they’re really excited about Ford being in this business,” Farley said during an investor call Feb. 10. “We’re a trusted company. They’ve been buying our vehicles for a long time and we’ve done our homework on this business.”
Can’t leave a plant idle
Energy storage systems range from utility-scale, such as large battery containers for the grid, to residential systems used with rooftop solar panels. They capture electricity and store it for use later to help stabilize the power grid and offset blackouts.
Ford started looking at the energy storage business when it saw that electric vehicles were not selling at the volume predicted.
Back in 2021, when Ford expected voluminous EV sales ahead, it formed a joint venture with SK On, a South Korean battery company, to make batteries for EVs. The partnership was called BlueOval SK and Ford and SK On planned an $11.4 billion investment to build three large battery factories: One in Tennessee and two in Glendale, Kentucky, about 53 miles south of Louisville.
But with demand for EVs failing to materialize at the rate the industry expected, Ford and SK On moved to dissolve their joint venture in December, just months after Ford had begun producing EV batteries for its all-electric F-150 Lightning pickup at the Kentucky facility. The dissolution of BlueOval SK awaits regulatory approval and other closing conditions, but it’s expected to be finalized in the first half of this year, Ford spokeswoman Emma Bergg told the Free Press.
“The joint venture disposition was a mutual decision by SK and Ford to optimize their respective strategic priorities with full operational control of their facilities,” Bergg said in an email. “BlueOval SK continues to own and operate the plant (in Kentucky). A wholly owned Ford subsidiary will own and operate the Kentucky battery plant once the joint venture disposition agreement closes.”
The two facilities at the BlueOval SK Battery Park in Glendale are each about 4 million square feet, said Keli McAlister, BlueOval SK spokesperson. Ford cannot leave that much square footage unused, accumulating costs without a return. So converting the Kentucky space to build battery energy storage systems — which is expected to start production in late 2027 — will help Ford mitigate the costs of maintaining the idled plant.
“I think they figured they’d be better off trying to scale that rather than scrapping the battery capacity they built out for EVs,” David Whiston, autos analyst at Morningstar, told the Free Press. “If they weren’t doing energy storage, they’d have to decide on finding another use (another vertical than energy or more likely something auto related) or closing it down and writing off everything associated with it.”
Whiston estimates it could cost Ford $1 billion to $2 billion depending on whether equipment inside needed to be written off completely or not. As it is, it is going to cost Ford $19.5 billion to restructure its automotive business this year to pivot resources away from EVs to offering more hybrid and gasoline models and enter the energy storage system space.
Ford said the move into the new business is an investment in energy security for the utilities and data centers that will use the systems and it’s an investment in American workers because each new facility means thousands of more high‑skill manufacturing jobs that support local economies.
About 1,500 workers were laid off at the Kentucky site in December when Ford halted EV battery production and stopped making the F-150 Lightning pickup truck. Ford has said those workers can apply for the new positions created in the repurposed Kentucky facility when it opens. Bergg said the wholly owned Ford subsidiary in Kentucky will hire “more than 2,100 people.”
The F-150 Lightning will transition into a new model that will use Extended Range Electric Vehicle (EREV) technology, meaning it has a gasoline generator on it to recharge it, giving it an estimated range of more than 700 miles and added charging capacity.
Besides retooling the Kentucky plant, Ford has said it will also use BlueOval Battery Park Michigan in Marshall to produce smaller amp-hour cells for use in residential energy storage solutions. Also at Marshall, Ford will build the lithium iron phosphate (LFP) prismatic battery cells used in EVs starting later this year. The LFP batteries will power Ford’s upcoming midsize all-electric truck off a new Universal EV Platform and due to market next year.
Bergg said Ford will hire about 1,700 people for the plant in Marshall.
‘Success is not guaranteed’
Sam Fiorani, vice president of Global Vehicle Forecasting at AutoForecast Solutions, said other automakers are walking away from some of their battery joint-ventures and have taken charges against their investments, so “entering an industry other than vehicle production has traditionally been difficult for companies like Ford, and this will not be easy. Success is not guaranteed.”
General Motors, for example, said it would record a $7.1 billion loss in the fourth quarter of 2025, largely reflecting a decline in the value of its investments in battery factories and EV assembly lines.
But Fiorani said with billions of dollars in battery investments, Ford needs a way to make some financial return.
“Sales of electric vehicles will not reach the levels necessary to absorb the many gigawatt hours of battery production capacity Ford has built, and the growth of data centers offers a possible outlet for some of this capacity,” Fiorani said. “Estimates put the need for data center power nearing 1,000 terawatt hours by early next decade, and these centers could harness stationary batteries well beyond the 100 gigawatt hours capacity at Tesla.”
Also, considering Ford’s 122-year history and its many ventures beyond the auto industry, there are those who believe the automaker will find success.
“I wouldn’t bet against them being capable of doing it,” Ardes Johnson, a former Tesla executive who is the chief executive of NeoVolta, which provides batteries for homes and businesses, told The New York Times in a Feb. 12 article.
Farley makes a case
Shortly after World War I, in about 1919, founder Henry Ford wanted to ensure he could control his raw materials used in making cars, Ryan said. So Ford bought coal mines, rubber plantations, a railroad, ships and lumber mills. And, of course, in 1960s Ford bought Philco and built Mission Control.
The automaker sold those entities decades ago to focus again on designing, engineering and making automobiles. So earlier this month, some Wall Street analysts questioned Farley on his thinking around entering a business other than autos, and what customers Ford may be eyeing.
“It’s early days, but at the strategy level there’s no doubt that the growth for battery storage — for both data center buildout and grid stability, in places like California, Texas, and Florida — is exploding both for consumers and business users like data centers,” Farley told analysts on the Feb. 10 call. “We have been deeply engaged with customers as we developed this business plan and we continue to engage them in specific contracts for our 20 gigawatt-hour capacity in 2027 and beyond.”
To put that in perspective, a gigawatt is equal to 1 billion watts. A power plant with a capacity of one gigawatt-hour could power about 876,000 households for one year if they collectively consume 10,000 kilowatt-hours each and the plant operates continuously, according to Carbon Collective, an investment adviser focused on climate change.
Farley said energy storage system production is faster than vehicle production so Ford can, “get scale over revenue much faster.” He also said the automaker has a significant advantage with technology over some competitors.
“We have access working with CATL, licensing their technology, but in our own place,” Farley said.
CATL, a Chinese company, is one of the largest manufacturers of lithium-ion batteries for EVs and energy storage systems and in 2023 Ford licensed use of its technology. That same year, Ford invested $3 billion to build the factory in Marshall so as to use the CATL technology. Farley said the company now has a significant advantage with lithium iron phosphate technology than competitors who may be importing materials at high tariffs.
“Ford has the manufacturing expertise to scale this business. We have great partners who can help us and we’re really excited to be a customer-facing business,” Farley said.
But Farley said Ford does not want to just get contracts to make these systems, it wants to offer an “end-to-end solution for customers” that provides service over the long term, too.
Not just a moon shot
The key to Ford’s mission is to supply the massive data center market for artificial intelligence or AI, said Sam Abuelsamid, vice president at automotive industry research and advisory firm Telemetry.
“These data centers need enormous amounts of reliable power and energy storage is essential to avoiding disruptions caused by grid unreliability,” Abuelsamid said. “That’s why almost every battery vendor is or has transitioned at least some of the capacity they put in for EVs in the last several years to producing LFP batteries for storage.”
For example, LG Energy Solution spent $1.4 billion to expand its Holland, Michigan, plant from making batteries for EVs to also making energy storage systems. Abuelsamid said LG is going to do the same thing with the now former Stellantis joint venture plant in Windsor, Ontario.
“While right now is a great time to be doing this with so many data centers being thrown together, the question is how long will that demand last?” Abuelsamid said. “If the AI bubble bursts (and it most likely will) that demand is going to evaporate quickly.”
For longer term demand, perhaps wind and solar facilities will need the energy storage systems, Abueslamid said.
Farley insists the energy storage systems business isn’t just a moon shot — it fits as an ancillary business to Ford’s highly profitable commercial vehicle unit, Ford Pro.
“It fits right into the wheelhouse of our expertise,” Farley said. “Given our advantage technologically, maybe for a period of time before battery costs commoditize, we feel like the customers are very excited.”
(This story was updated to clarify that Ford is licensing technology from CATL.)
Jamie L. LaReau is the senior autos writer who covers Ford Motor Co. for the Detroit Free Press. Contact Jamie at jlareau@freepress.com. Follow her on Twitter @jlareauan. To sign up for our autos newsletter. Become a subscriber.
This article originally appeared on Detroit Free Press: Ford bets on a daring new business to keep battery plants operating
Reporting by Jamie L. LaReau, Detroit Free Press / Detroit Free Press
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