U.S. automakers are more and more coming into the power storage enterprise as they pivot away from electrical autos and check out make use of battery factories that value billions of {dollars}.
Power storage makes use of loads of the identical underlying expertise as EV batteries to retailer energy for properties, companies and even utilities.
Tesla has been investing on this space for at the least a decade. Others automakers, equivalent to Ford and GM, made vital bulletins in 2025, simply as uncertainty concerning the close to way forward for EV gross sales started to develop.
Electrical energy demand is rising after years of comparatively flat costs, largely fueled by the rise of information facilities, in response to the U.S. Power Info Administration. Electrification — or gasoline heaters, stoves and different home equipment shifting to electrical ones — can be an element, stated Ramteen Sioshansi, a professor of engineering at Carnegie Mellon College who research the electrical energy trade.
However this market remains to be comparatively new, he added, and the way a lot demand there shall be within the close to future is speculative.
“If loads of auto producers head on this course, you find yourself with a glut of provide and never sufficient demand to soak up it,” he stated. “It may very well be a transfer the place the car producers basically discover themselves in the identical place they’re proper now with respect to electrical car demand.”
Battery energy
Renewable power sources equivalent to photo voltaic panels and wind generators can have an “intermittency downside,” which means they solely generate energy when the solar is shining or a breeze is blowing — and which may not be when it is wanted. Batteries can fill the hole by accumulating and stockpiling electrical energy to make use of at one other time or promote it again to the grid.
Batteries can even acquire power from the grid at occasions when charges are decrease, like at evening. Power-hungry companies can use that storage to chop electrical energy prices.
“It is a completely legitimate approach of working,” stated Pete Tillotson, senior analysis analyst at Benchmark Mineral Intelligence. “And it’ll type a income stream for almost all of belongings on the grid.”
Automakers
Ford stated in December it could convert a Kentucky battery manufacturing unit it had lately constructed with companion SK On to make batteries for power storage. It additionally plans to dedicate some manufacturing unit area to make cells for residential storage at a manufacturing unit in Marshall, Michigan.
Ford remains to be utilizing the Marshall plant to make batteries for an upcoming midsize electrical truck. It has spent about $10 billion on each the Kentucky and Michigan factories and is spending one other $2 billion to develop the power enterprise, in response to the corporate.
Tesla’s Power division has been round since 2015, when CEO Elon Musk unveiled the corporate’s Powerwall and Powerpack batteries. It has grow to be a brilliant spot for Tesla, as its personal EV market gross sales and share have fallen. Margins in that enterprise are about double these of Tesla’s automotive enterprise, and its income is now about 20% of the EV maker’s whole.
Fred Closter checks his Tesla Powerwall battery system on Thursday Feb. 17, 2022, at his house in Boynton Seaside.
Susan Stocker | Solar Sentinel | Getty Photographs
Ford’s crosstown rival Common Motors based GM Power a number of years in the past, then launched a Tesla-like residential photo voltaic product referred to as the PowerBank in October 2024. Final yr, it stated it could companion with Redwood Supplies to used each outdated and new EV batteries for power storage.
GM Power stated in October that gross sales had quintupled since January, with 30% month over month income progress. Other than the PowerBank batteries, the division additionally sells charging adapters and tech for utilizing the car itself as a backup battery for a house.
Demand
The price of battery storage methods is considerably decrease than forecasts have been projecting about 15 years in the past, Sioshansi stated.
There’s additionally an all however assured buyer base. Utilities are required by regulation in some states to at the least take into account deploying power storage, and California has set power storage targets.
Residential market-batteries, such because the Tesla Powerwall or GM PowerBank, can complement a photo voltaic panel on the roof, act as a backup energy supply for blackouts or assist with promoting extra energy again to the grid. However the comparatively excessive value of those methods for owners is liable to restrict demand, Sioshansi stated.
Business makes use of differ. Demand from companies like information facilities is anticipated to surge. GM and Redwood Supplies cited Division of Power analysis displaying a possible threefold leap in power demand by 2028 over 2023 ranges.
Information facilities that want loads of energy might see power storage as a wanted answer within the face of the shortfall.
Invoice Ford, Government Chairman of Ford Motor Firm, publicizes at a press convention that Ford shall be partnering with the worlds largest battery firm, a China-based firm referred to as Modern Amperex Expertise, to create an electric-vehicle battery plant in Marshall, Michigan, on February 13, 2023 in Romulus, Michigan.
Invoice Pugliano | Getty Photographs
In the meantime, EV gross sales within the U.S. dropped from about 10% of the brand new automotive market within the third quarter of 2025 to simply beneath 6% the next quarter. Ford stated in 2023 the corporate was anticipating EV gross sales to be about 45% of recent automotive gross sales by 2030. Now the forecast is 9% to 18%, Ford spokesperson Emma Bergg advised CNBC.
However power storage is a really totally different enterprise from promoting automobiles. Although batteries share the identical underlying expertise, they’re considerably totally different technically; car batteries need to be optimized for light-weight and compact form and people for power storage don’t, for instance.
“They’re considerably totally different merchandise,” Sioshansi stated. “The client, and the way you could market and promote these merchandise, goes to look totally different in comparison with what an organization like, take GM for instance, is accustomed to doing.”
Ford has no direct expertise in power storage, Tillotson stated. Nevertheless, he added, it does have expertise working with CATL, the world’s largest battery maker, which is offering battery tech for Ford’s Marshall manufacturing unit.
The problem is that these companies should compete towards established gamers.
“You have then obtained relative expertise hole — discovering the workforce to have the ability to produce these fairly difficult cutting-edge applied sciences towards a competitor that has mastered scale and efficiency at scale,” Tillotson stated. “That may show difficult. And that is to not say that I do not assume the market might get there within the U.S., however it must take a comparatively very long time to get there until they’ll discover a workforce.”
One carrot for companies like Ford is a push towards U.S. manufacturing. There are tax credit score incentives within the power trade for initiatives that keep away from sure nations thought-about “international entities of concern.” Within the case of power storage, which means China, which is the world’s largest producer of power storage tech.
“That is the massive incentive to shift in direction of that expertise,” Tillotson stated.
