Ford Enters Battery Storage Market for Data Centers & Grid

Ford Repurposes Battery Production Capacity into Storage Solutions

In light of a strategic shift concerning the production of larger electric vehicles, Ford is introducing a new business venture focused on battery storage.

Rather than abandoning its plans to manufacture batteries, Ford announced on Monday a redirection of that existing capacity. This pivot will establish a new business dedicated to battery storage systems.

New Battery Storage Systems

These systems will utilize more affordable lithium iron phosphate (LFP) batteries. Their primary applications will include powering data centers and stabilizing the electrical grid by managing demand fluctuations.

Ford anticipates the initial shipments of these battery storage systems to commence in 2027. The company intends to achieve an annual production capacity of 20GWh.

Investment and Manufacturing

Approximately $2 billion will be invested into this new business over the next two years.

Ford will leverage its existing manufacturing infrastructure, specifically the Kentucky facility, to repurpose it for this new endeavor.

The facility will produce LFP batteries utilizing technology licensed from CATL, a Chinese company. It will also manufacture battery energy storage system modules and 20-foot DC container systems.

Competition in the Battery Storage Market

Ford is joining a growing number of automotive manufacturers entering the battery storage sector.

Tesla has been actively selling battery storage products for the past decade, currently deploying around 10GWh each quarter.

General Motors also offers a range of battery storage solutions for both residential and commercial applications.

Target Customers

Lisa Drake, Ford’s vice president of technology platform programs and EV systems, indicated that the primary focus for this new business will be commercial grid customers.

Data centers represent a secondary market, with plans to eventually extend offerings to include home storage products.

Strategic Rationale

“The technology preferred by most customers in this space is an LFP prismatic container system,” Drake explained during a press briefing.

“Considering our existing license to manufacture this technology within the U.S., combined with our century-long experience in large-scale manufacturing, this expansion represents a logical and natural progression for our company.”

BlueOval Battery Park Michigan

Ford confirmed that the BlueOval Battery Park Michigan in Marshall remains on schedule to begin LFP battery production in 2026.

These batteries, also utilizing CATL technology, will be integrated into Ford’s forthcoming mid-sized electric truck.

However, the Michigan facility will also be adapted to produce smaller Amp-hour cells intended for use in residential energy storage solutions, broadening Ford’s customer base.

Evolution of BlueOval Battery Park Michigan

The BlueOval Battery Park Michigan project has undergone several revisions since its inception.

Initially, in February 2023, Ford announced a $3.5 billion investment to construct the factory for LFP battery production.

Construction was temporarily halted in September 2023, followed by a revised plan in November 2023, reducing the production capacity to 20 gigawatt-hours – approximately 43% smaller than originally planned.