U.S. automakers including Ford and General Motors are expanding into the energy storage market, leveraging existing battery technology and factories as electric vehicle (EV) sales growth cools. The move places them in more direct competition with Tesla, which has been building its energy storage business for nearly a decade.
Energy storage systems use battery technology similar to EVs but are designed to store electricity for homes, businesses, and utilities. These systems help balance renewable energy supply, reduce electricity costs, and provide backup power during outages. Growing electricity demand—driven by data centers and broader electrification—has made storage an increasingly attractive market, according to the U.S. Energy Information Administration.
Ford announced in December that it will convert a Kentucky battery plant, originally built with SK On for EV production, to manufacture batteries for energy storage. The company also plans to allocate space at its Marshall, Michigan facility to produce residential storage cells, while continuing EV battery production for an upcoming electric truck. Ford has invested roughly $10 billion in its battery factories and an additional $2 billion to scale its energy business.
General Motors has also accelerated its push through GM Energy, which introduced a residential battery system, the PowerBank, in late 2024. GM has partnered with Redwood Materials to reuse new and retired EV batteries for stationary storage applications. The company reports rapid growth, with sales increasing fivefold in 2025 and month-over-month revenue growth of about 30%.
Tesla remains the market leader. Its Energy division, launched in 2015 with the Powerwall and Powerpack, has become a key growth engine as EV margins decline. The segment now accounts for roughly 20% of Tesla’s revenue, with margins about double those of its automotive business.
Industry experts caution that the market is still developing. While utilities in some states are required to consider energy storage and commercial demand—particularly from data centers—is expected to surge, residential adoption may be constrained by high upfront costs. There is also concern that a rush of automakers into the sector could create oversupply if demand fails to scale as expected.
Despite these risks, policy incentives supporting U.S.-based manufacturing and restrictions on supply chains linked to China are encouraging domestic investment. As EV sales forecasts are revised downward, energy storage is emerging as a strategic alternative growth path for automakers seeking to maximize returns on their battery investments.
