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GM & Ford Shift Gears to Defense and Energy Storage
5 Sep
Summary
- GM and Ford are entering military contracts and energy storage markets.
- These new ventures aim to diversify revenue as EV sales slow.
- Automakers seek to utilize existing EV battery production capacity.
General Motors and Ford are exploring new avenues for growth by venturing into the defense industry and the energy storage system (ESS) market. This strategic shift comes as both companies face slowing new vehicle sales and significant financial losses from their electric vehicle (EV) programs.
Analysts suggest these new markets offer opportunities to diversify revenue, particularly by utilizing excess capacity from EV battery production. The ESS market, projected for substantial growth, uses technology similar to EV batteries and is driven by increasing energy costs and data center demands. GM is developing next-generation batteries for grid-scale storage, while Ford plans to convert a Kentucky factory for ESS production by late 2027.
In the defense sector, GM has a head start, having resurrected its defense unit in 2017 and recently securing a potential multi-billion dollar contract for infantry squad vehicles. Ford has also joined efforts, partnering with General Dynamics Land Systems for UK defense contracts. These initiatives echo the "Arsenal of Democracy" efforts during World War II, highlighting a focus on domestic manufacturing and leveraging automotive industry capabilities for military supply.
