Amidst cooling EV demand, Ford announces a major shift to produce 20GWh of battery storage annually for data centers by 2027, repurposing key manufacturing assets.
DEARBORN - In a decisive move that underscores the shifting tides of the global energy and technology markets, Ford Motor Company has announced a major strategic pivot, reallocating significant portions of its battery manufacturing capacity from electric vehicles (EVs) to stationary energy storage systems. The automaker revealed in mid-December 2025 that it plans to launch a dedicated battery energy storage business targeting the voracious power demands of artificial intelligence data centers and the broader electric grid. The initiative aims to reach an annual production capacity of 20 gigawatt-hours (GWh) by late 2027, marking a significant departure from its previous EV-centric roadmap.
The transition comes with a heavy financial and operational restructuring. According to reports from Business Insider and Planet Detroit, Ford is taking a financial hit of approximately $19.5 billion related to the shift away from EVs. This strategic realignment involves repurposing massive manufacturing facilities, including a newly built plant in Kentucky, to produce Lithium Iron Phosphate (LFP) batteries specifically designed for stationary storage rather than automotive propulsion.
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The logistics of this pivot are extensive. Ford stated that shipping of the new battery energy storage systems (BESS) is scheduled to begin in 2027. To achieve this, the company is investing $2 billion over the next two years to retool its production lines. TechRadar reports that the Kentucky plant, originally destined to churn out EV batteries, is expected to begin its new production mandate within 18 months.
By targeting 20GWh of annual capacity, Ford is attempting to enter a "fiercely competitive" market, as described by Energy-Storage.News. While 20GWh is a substantial figure, industry context provided by The Register notes that it is not necessarily market-dominating; for comparison, competitors like Tesla have signed single-client deals for over 15 GWh. However, Ford's entry signals a validation of the sector's growth potential, driven largely by the booming energy needs of generative AI infrastructure.
The decision acts as a barometer for two colliding industry trends: the cooling of consumer demand for electric vehicles and the explosive energy consumption of the tech sector. Electrek notes that Ford is "betting on data centers as EV incentives fade." As the adoption curve for EVs flattens in Western markets, automakers are left with excess battery manufacturing capacity that risks becoming a liability.
Simultaneously, the rise of AI has created an urgent need for reliable, grid-scale power storage. Data centers require uninterrupted power supplies (UPS) and load-balancing capabilities that large-scale battery arrays can provide. By pivoting to BESS, Ford is effectively diversifying its portfolio, turning a potential loss in the automotive sector into an opportunity in the digital infrastructure market.
"Ford plans to deploy at least 20 GWh annually by late 2027... The battery storage systems will start shipping in 2027 and the company plans to build 20GWh of annual capacity." - TechCrunch
The transition has immediate and painful consequences for the workforce. WDRB reported a stark development in Kentucky, where all 1,600 employees of the brand-new electric vehicle battery plant were laid off. These layoffs occurred before the plant could be converted to manufacture batteries for data centers and utilities. While the long-term goal is to bring capacity back online, the immediate human cost highlights the volatility of the green transition.
This move represents a deepening convergence between the automotive and technology sectors. Traditionally, these industries operated in parallel; now, they are competing for the same energy resources and supply chains. By utilizing LFP battery technology-often sourced via Chinese partnerships, according to CBT News-Ford is navigating a complex geopolitical landscape to supply critical U.S. infrastructure.
From a business perspective, Ford is mitigating risk. The "take-or-pay" nature of many battery supply contracts means automakers must utilize the cells they committed to buying or producing. If they cannot put them in cars, they must put them somewhere else. Data centers offer a high-volume, relatively standardized alternative to the complex and consumer-preference-driven car market. Furthermore, Solar Power World notes that Ford is also eyeing the residential market with 5-MWh BESS units, suggesting a multi-pronged approach to energy independence.
Looking ahead to 2026 and 2027, the success of this pivot will depend on execution speed. The BlueOval Battery Park in Marshall, Michigan, is on track to be operational by 2026, according to WWMT, and will play a crucial role in this expanded storage strategy. If Ford can successfully retool its workforce and facilities within the 18-month window, it could establish itself as a key utility player.
However, the landscape remains volatile. As Finance Magnates highlights, this is a bet on data center energy storage over EV adoption. Should the EV market rebound faster than anticipated, Ford may find itself constrained by the very pivot intended to save it. For now, the automaker is following the immediate demand, signaling that in the near term, the batteries of Detroit will power the servers of Silicon Valley rather than the highways of America.
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