As Ford shifts away from making large electric vehicles, automakers are adding new product lines to find a home for batteries.
Ford announced Monday that it is canceling plans to make batteries for these vehicles and instead converting that capacity to a new battery storage business. These energy storage systems use inexpensive lithium iron phosphate batteries and are used to power data centers and ease demand on the power grid.
Ford says it plans to begin shipping the battery storage system in 2027, with an annual capacity of 20GWh.
Ford will invest about $2 billion in new businesses over the next two years. Under the plan, Ford would reuse existing manufacturing capacity at the Kentucky plant. Ford will produce LFP batteries, battery energy storage system modules and 20-foot DC container systems at the facility using technology licensed from China’s CATL.
Ford joins a number of automakers operating or planning to enter the battery storage space. Tesla has spent the past decade selling battery storage products, deploying about 10GWh every quarter. General Motors also offers battery storage products for home and commercial use.
Lisa Drake, Ford’s vice president of technology platform programs and EV systems, said the “primary” opportunity for the new business will be commercial grid customers. But data centers are secondary, and Ford plans to offer some home storage products, Drake said.
“Once we went to market, it was clear that the technology of choice for most of these customers was an LSP prismatic container system,” Drake said on a call with reporters. “And given the fact that we already have a license to build that technology in the United States, combined with our century of manufacturing experience in large-scale manufacturing, it made a lot of sense as a natural neighbor for us.”
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Ford’s Blue Oval Battery Park in Marshall, Michigan, is scheduled to begin producing LFP batteries in 2026 and remains on track, the company said. These LFP batteries also use CATL technology and will be used in Ford’s upcoming medium-duty electric trucks. However, one adjustment will be made at the Michigan plant. Ford said the technology will also be used to make small amp-hour cells for use in “residential energy storage solutions,” suggesting Ford’s plans extend beyond commercial customers.
Michigan’s Blue Oval Battery Park has gone through several iterations in its short life. In February 2023, Ford announced it would invest $3.5 billion to build a factory to manufacture LFP batteries for its expanding portfolio of electric vehicles. Ford abruptly halted construction of the plant in September 2023. Two months later, it announced plans to reduce its production capacity to 20 gigawatt hours, about 43% less than planned.
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