US Automakers Expand Into Energy Storage as EV Demand Slows

Automakers in the United States are increasingly moving into the energy storage market as uncertainty weighs on demand for electric vehicle (EV) batteries, opening new revenue streams for companies such as Ford, General Motors and Tesla. Energy storage systems rely on similar technology to EV batteries and allow electricity to be stored for homes, businesses and utilities, helping balance intermittent renewable generation and rising power demand.

Ford announced in December that it plans to convert a recently built battery factory in Kentucky, developed with partner SK On, to produce batteries for energy storage applications. The company will also allocate part of its Marshall, Michigan facility, currently producing batteries for a midsize electric truck, to residential energy storage. “We have spent about US$10 billion on the Kentucky and Michigan factories and are investing another US$2 billion to grow the energy business,” a Ford spokesperson said.

Tesla has operated in the energy storage segment since 2015 through its Powerwall and Powerpack products. Tesla Energy now accounts for roughly 20% of the company’s total revenue, with margins nearly double those of its automotive division. General Motors has also expanded its GM Energy unit, launching residential solar and storage products such as the PowerBank in 2024 and partnering with Redwood Materials to repurpose both new and end-of-life EV batteries for energy storage applications. GM Energy reported month-over-month revenue growth of 30% in 2025, with total sales quintupling since January, according to company officials.

Industry experts note that the shift carries both opportunities and risks. Ramteen Sioshansi, a professor of engineering, Carnegie Mellon University, warned that rapid expansion could create oversupply. “If a lot of auto manufacturers head in this direction, you end up with a glut of supply and not enough demand to absorb it,” he said. By contrast, Pete Tillotson, senior research analyst, Benchmark Mineral Intelligence, highlighted the long-term value of storage assets. “It’s a perfectly valid way of operating, and it will form a revenue stream for the majority of assets on the grid,” he said.

The move into energy storage reflects broader changes in US electricity consumption. After years of relatively flat growth, demand is rising due to the expansion of data centers and the electrification of appliances and transportation. Automakers are leveraging their multibillion-dollar battery manufacturing investments to capture a share of this emerging market, aiming to stabilize revenues amid volatile EV sales while capitalizing on the growing need for grid-scale and distributed energy storage.

In December, Ford posted a US$19.5 billion writedown and reset its EV strategy, shifting part of its battery production toward energy storage as EV demand softened.