GM’s defense infantry squad vehicle was designed to meet US military specifications. It is based on the automaker’s Chevrolet Colorado ZR2 off-road midsize pickup truck architecture. GM Defense DETROIT – General Motors and Ford Motor have competed with each other for more than a century in racing, vehicle sales and many other automotive activities. But their latest battlegrounds have moved to real battlefields and the U.S. energy grid. Automakers’ efforts so far are largely focused on military vehicles, but they could grow over time. Simultaneously, both companies are entering the energy storage systems, or ESS, market amid an expected growing need related to rising consumer and data center energy costs. Energy storage systems use much of the same underlying technology as electric vehicle batteries to store energy for homes, businesses, and even utilities. Wall Street analysts see both markets as potential new growth areas for automakers. At one time, it was thought that new opportunities could arise from all-electric vehicles, but Ford and GM have since lost billions of dollars on those efforts. “They’re looking at new verticals,” Morningstar senior equity analyst David Whiston told CNBC. “For Ford to follow GM’s lead on defense and energy makes a lot of sense because you have all this electric vehicle capacity that you don’t need now. So instead of selling those factories, it’s a way of trying to capitalize on the data center boom.” The two markets are expected to represent small portions of the companies’ focus and revenue for the foreseeable future, but could help automakers diversify their operations and complement their core businesses as new vehicle sales slow in the U.S. “It will be difficult to move the needle here.” The global ESS market is estimated to grow from $668.7 billion in 2024 to $5.12 trillion in 2034, according to the research and consulting firm Global Market Insights. As part of that, the company expects to see significant expansion in the U.S. “We’re seeing this huge growth projection, and it’s already started to grow,” Devon Wilson, vice president of sales and marketing for LG Energy Solution’s energy storage division in the U.S., said during a recent event. “There’s a huge need for critical electricity in the country.” GM and Ford are trying to capitalize on that expected growth to fill a void. Companies poured billions of dollars into plants to produce battery cells to meet demand for electric vehicles that failed to materialize. GM’s energy business does not currently offer its own ESS, but its military division does and its Ultium Cells joint venture in Tennessee produces cells for partner LG Energy Solution for storage. In the long term, GM could make further progress on ESS, including developing next-generation sodium-ion batteries with Denver-based startup Peak Energy. Kurt Kelty, GM’s vice president of batteries and sustainability, said he believes the technology can reshape grid-scale energy storage. “We are developing the cells right now. The performance of these cells is tremendous,” Kelty said. “The ESS market is a very attractive market. It’s a big market. It’s growing very quickly and it’s something we can contribute to.” GM also has a partnership with Redwood Materials to reuse its large electric vehicle batteries for energy storage systems. GM also offers electric vehicle charging and ESS for residential use through its power unit. Meanwhile, Ford said in December that it plans to spend $2 billion to launch an energy business, including converting a battery factory in Kentucky it had recently built with partner SK On to make energy storage units by the end of 2027. It also plans to dedicate some of the factory space to making cells for residential storage at a factory in Marshall, Michigan. “Investors see value in Ford’s ESS business,” Morgan Stanley analyst Andrew Percoco said in a note to investors in June. He also called it an “underrated driver” of a path to profitability for Ford’s Model e electric vehicle business. Ford Energy is part of the company’s Model e electric vehicle segment, which has generated losses of $4 billion in 2026 before breaking even in 2029. A key turning point is expected to be the company’s ESS business coming online in 2027. Ford BlueOval Battery Park under construction in Marshall, Michigan. The plant will produce lithium-ion phosphate batteries for electric vehicles and smaller batteries for home use.Jim West | UCG | Universal Images Group | Getty ImagesFord CEO Jim Farley told investors on the automaker’s second-quarter earnings call in July that he is in the “third inning” of selling the 20 gigawatt hours of production capacity for ESS after announcing a five-year framework agreement with renewable energy services provider EDF Power Solutions North America. Defense Industry GM is years ahead of Ford when it comes to the American defense industry. GM resurrected its defense unit in 2017 after a 14-year hiatus. It has worked with the U.S. military on many projects, but the automaker recently received a contract from the U.S. Army to build infantry squad vehicles, or ISVs, which it said could exceed $1 billion, depending on congressional appropriations. While the contract amount is small compared to the company’s $48 billion in revenue during the second quarter, opportunities for the automotive industry in US military operations are expected to grow. “Taking advantage of the capabilities, scalability and manufacturing capabilities that come with all automotive companies and their tiered suppliers is a huge benefit,” Alfred Grein, executive director of research and technology integration at the Center for Land Vehicle Systems, told CNBC. US Army Combat Capabilities Development Command, said it expects its defense revenue in 2026 to grow to nearly $700 million and aims to deliver positive results in terms of earnings before interest and taxes this year, while building a portfolio of future businesses. “We are also working with Lockheed Martin and other leading companies to expand speed, scale and resilience in the defense industrial base,” GM CEO Mary Barra told investors in July. “Over time, all of this should make GM Defense a more significant and diversified contributor to our earnings.” GM Defense’s next-generation tactical vehicle prototype. Courtesy image Grein, who manages manned and unmanned ground systems technology across the U.S. military, said the Trump administration has made it easier for new companies, including automakers, to win such contracts. He also said that domestic manufacturing in the United States is essential. “Obviously, concerns about the involvement of foreign entities, particularly in Department of Defense products, are becoming increasingly crucial,” Grein said. GM and Ford were included in a group of companies that were awarded prototype contracts to produce heavy vehicles for infantry squads, which are bulkier versions of what the companies have previously worked on. Ford has not released many details about its defense efforts in the United States. However, the automaker on Wednesday announced a partnership with General Dynamics Land Systems and engineering firm Ricardo to compete for a next-generation vehicle for the U.K. Ministry of Defense’s Light Mobility Vehicle program. GM and Ford’s defense efforts are the latest in a long line of such initiatives, including, notably, the “Arsenal of Democracy” during World War II, in which the companies worked with the United States and Allied nations to provide military supplies to fight Nazi Germany. “We already dominate that market.” in the commercial world. We want to offer the U.S. government the same benefits that our commercial customers get,” Farley told investors in July. “It’s a great opportunity for us… We are discussing and continue to discuss additional defense-related projects with the U.S. government.” Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.
