Ford and GM Are Now Making Batteries for the Power Grid, Not Just Cars

Tesla installed 8.8 gigawatt-hours of battery storage systems in the first three months of 2026, according to the company's quarterly results announced in April. That figure matters because Ford and General Motors are now trying to do something similar — but neither company started out planning to make grid batteries.

Both automakers took massive financial losses on their electric vehicle programs in late 2025 and early 2026. Ford wrote off $19.5 billion in December 2025 and canceled several EV projects. GM followed with a $6 billion writedown in January 2026. But both companies still owned battery factories and manufacturing equipment. Rather than shut those plants down, they decided to retool them to make batteries that power electrical grids instead of vehicles.

Why the Power Grid Needs More Batteries Now

The United States has installed 165 gigawatt-hours of battery storage capacity as of the first quarter of 2026 — most of it connected to utility grids. That market was barely a commercial business ten years ago.

The main reason for this sudden growth is artificial intelligence. Data centers that train and run AI systems consume enormous amounts of electricity, and they need power constantly. If a data center loses power for even a few hours, companies lose money and customers lose access to services. Battery storage systems can now hold enough power to keep a data center running for over 100 hours when renewable energy sources like solar and wind dip temporarily. For companies running these massive facilities, that kind of backup is essential, not optional.

Think of it like a battery in your phone — but scaled up thousands of times over. Just as your phone's battery keeps it running when you're away from a charger, these grid batteries keep data centers running when the sun isn't shining or the wind isn't blowing.

Ford's New Energy Business

Ford moved fast once it decided to enter grid storage. In December 2025, the company said it would use an underused factory in Kentucky to make these batteries. By January 2026, it appointed Lisa Drake, a manufacturing veteran, to lead a brand-new division called Ford Energy.

In May 2026, Ford announced its first major deal: a company called EDF Power Solutions will buy up to 4 gigawatt-hours of batteries from Ford each year. Ford plans to get the cells — the core component inside a battery — from its existing battery plants in Kentucky and Michigan. Those plants were built and paid for years ago to make EV batteries. Now they need customers to keep running and producing income.

The batteries Ford is making come in containers that plug directly into the electrical system in a simple way. Engineers prefer this design because it is straightforward to install and wastes less energy than other configurations.

GM's Approach

General Motors is exploring a slightly different path. In June 2026, GM announced it is developing batteries made specifically for large power grids. This is separate from a home battery system GM already sells to people who own electric cars.

GM is also thinking carefully about chemistry — the blend of materials inside a battery. Around the same time, Reuters reported that GM might stop using a chemistry called lithium iron phosphate in future electric vehicles. Lithium iron phosphate is good for grid storage because it lasts a long time and stays stable when charged and discharged repeatedly, but it doesn't pack as much energy into the same space — a problem for cars that need to drive hundreds of miles on a single charge. By steering that chemistry toward grid storage instead, GM can use it where it works best.

GM is also working with a recycling company called Redwood Materials to build batteries from recycled materials in the United States, a move that helps meet federal rules favoring domestic manufacturing.

Where Tesla Stands

Tesla's 8.8 gigawatt-hours deployed in one quarter shows what an established player can do. Tesla built its battery storage business, called Megapack, from the ground up over several years. It learned by building and installing systems, then improving them based on real-world experience.

Ford and GM are not quite there yet. Ford's deal to sell 4 gigawatt-hours per year is meaningful, but it is still well below Tesla's current pace. GM's grid battery program is still in development. Neither company is close to matching Tesla's scale right now.

We have seen comparable situations before in other industries. When major tech companies started designing their own computer chips and storage systems in the early 2010s, established suppliers thought they had such large advantages that newcomers could never catch up. Some predictions held. But companies with big internal demand and the ability to shift their factories often moved faster than expected. Ford and GM have battery plants and technical talent already in place — the real question is whether they can develop and refine these grid batteries quickly enough to grab a meaningful share of today's growing market.

The Remaining Challenge: Where Batteries Come From

There is one problem that affects all three companies: most battery cells still come from outside the United States. Even though Ford and GM are focusing on domestic manufacturing, they need to buy raw materials and finished cells from global suppliers. China remains a major source, despite efforts by U.S. companies to become more independent.

GM's partnership with Redwood Materials and Ford's use of its own U.S. factories both aim to reduce this reliance. But building a fully domestic supply chain — from raw materials to finished battery — remains a goal for the medium term, not something that is complete today.

The Opportunity Is Real

The numbers are concrete: 165 gigawatt-hours of storage capacity now installed across the country, utilities building more projects, and data center operators signing contracts for long-duration batteries at speeds that would have seemed unlikely three years ago. This is not speculation about a technology that might work someday. The demand is here and growing.

What remains uncertain is how well Ford and GM can execute. Tesla's quarterly pace of 8.8 gigawatt-hours is the unofficial standard by which new entrants are measured. Ford's 4 gigawatt-hours per year is a solid start. GM is still ramping up. Neither company needs to match Tesla to build a profitable business — their existing factories and the scale of current demand mean they can succeed as strong number two or three players in a growing market. The question is whether they can move fast enough to capture that position before the market consolidates further.