DETROIT — The Detroit automakers rivalry is moving beyond showrooms and racetracks into national defense and the power grid, as General Motors and Ford Motor push into military contracts and energy storage to offset slower growth in all-electric vehicles.
Ford followed GM this year in pursuing U.S. military work after federal officials urged large domestic manufacturers to support defense needs with high-volume production expertise. Initial efforts center on military vehicles and could expand over time.
At the same time, both companies are entering the energy storage system market, aiming to use battery know-how from electric vehicles to supply power solutions for homes, businesses and utilities. The parallel expansions arrive as consumers face rising energy costs and data centers drive new electricity demand.
Analysts view defense and storage as incremental but promising growth areas. After heavy EV investments that have yet to pay off, the companies are seeking to redeploy capacity. One analyst said Ford is following GM into defense and that energy storage could capitalize on spare EV factory capacity tied to the data center boom. While these ventures are expected to remain small near term, they could diversify revenue as U.S. new-vehicle sales cool.
Energy storage and the Detroit automakers rivalry
Global Market Insights estimates the ESS market will expand from 668.7 billion dollars in 2024 to 5.12 trillion dollars by 2034, with substantial growth anticipated in the U.S. Executives in the storage sector cite a surge in fundamental electricity demand already underway.
GM and Ford aim to fill supply gaps after building battery plants for EV demand that has not materialized as expected. GM’s energy unit does not yet sell its own ESS, but GM Defense does, and the Ultium Cells joint venture in Tennessee produces cells for LG Energy Solution’s storage products.
Longer term, GM could deepen its ESS presence, including through development of next-generation sodium-ion batteries with Denver-based startup Peak Energy. GM’s vice president of battery and sustainability said current cell development shows strong performance and described ESS as a large, fast-growing market where the company can contribute.
GM also partners with Redwood Materials to repurpose large EV batteries for stationary storage and offers residential charging and storage through its energy business.
Ford announced in December that it would invest 2 billion dollars to launch an energy business, converting a Kentucky battery plant built with SK On to produce storage units by late 2027. It also plans to allocate capacity in Marshall, Michigan, for cells used in residential storage.
One investment bank called Ford’s ESS initiative an underappreciated path to profitability for the Model e unit. Ford Energy sits within Model e, which has guided to a 4 billion dollar loss in 2026 and targets breakeven by 2029, with ESS production ramping in 2027 as a key milestone.
Ford’s CEO told investors the company is in the third inning of selling out 20 gigawatt hours of ESS capacity after a five-year framework deal with EDF Power Solutions North America.
Defense industry
GM holds a head start in defense. The company revived GM Defense in 2017 after a 14-year pause and has collaborated on multiple military projects. It recently won a U.S. Army award to build infantry squad vehicles, a contract that could exceed 1 billion dollars depending on congressional appropriations. While that is small relative to GM’s second-quarter revenue of 48 billion dollars, officials expect greater roles for automotive manufacturing within military programs.
An executive at the U.S. Army Combat Capabilities Development Command Ground Vehicle Systems Center said leveraging the scale and supplier networks of auto manufacturers is a significant advantage. GM projects defense revenue approaching 700 million dollars in 2026 and is targeting positive EBIT this year while growing its backlog. GM’s CEO told investors the company is working with Lockheed Martin and others to expand speed, scale and resilience across the defense industrial base, positioning GM Defense as a more meaningful contributor to earnings over time.
Officials also noted that policy changes have eased entry for new contractors and emphasized the importance of domestic production, citing concerns about foreign involvement in Department of Defense supply chains.
Both GM and Ford received prototype awards to develop heavy infantry squad vehicles, larger variants of earlier efforts. Ford has disclosed limited details on its U.S. defense work, but it announced a collaboration with General Dynamics Land Systems and engineering firm Ricardo to compete for the United Kingdom Ministry of Defence’s Light Mobility Vehicle program.
The push into defense echoes a long history of automotive support for national security, including the World War II “Arsenal of Democracy.” Ford’s CEO told investors the company aims to deliver the same commercial market advantages to the U.S. government and is in ongoing discussions about additional defense-related projects. For the broader military, U.S. Army transformation efforts continue to face uncertainty amid leadership changes.