General Motors and Ford Motor are pursuing opportunities beyond their traditional automotive business, entering the defense and energy storage sectors following decades of rivalry in vehicle manufacturing and sales.
The Trump administration approached U.S. companies about leveraging their mass manufacturing expertise for military applications. GM has moved faster in this arena, having resurrected its defense division in 2017 after a 14-year absence. The company recently secured a contract with the U.S. Army to manufacture infantry squad vehicles, a deal potentially exceeding $1 billion depending on congressional appropriations. GM expects its defense revenue to reach nearly $700 million this year and is targeting positive earnings results. Ford entered the defense market more recently but is following GM’s strategy. Analysts note that both automakers possess manufacturing capabilities and supplier networks that make them attractive partners for military needs.
Simultaneously, the two companies are entering the energy storage systems market. This sector uses similar battery technology to electric vehicles and addresses growing demand related to rising energy costs and data center expansion. The global ESS market is projected to expand significantly, from $668.7 billion in 2024 to $5.12 trillion by 2034, according to Global Market Insights. This represents a potential growth avenue for automakers who invested billions in battery production facilities that exceed current electric vehicle demand.
GM is developing next-generation sodium-ion batteries with startup Peak Energy and partnering with Redwood Materials to repurpose large EV batteries for storage systems. Ford committed $2 billion to launch an energy business, planning to convert a Kentucky battery factory to produce energy storage units by late 2027 and allocate Marshall, Michigan factory space for residential storage cells. Ford Energy is part of its Model e segment, which targets breakeven profitability by 2029.
While these new ventures are expected to represent small portions of overall revenue in the near term, analysts view them as meaningful diversification opportunities as traditional U.S. vehicle sales slow and losses from EV operations mount for both manufacturers.
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