DETROIT — General Motors and Ford Motor have rivaled each other for more than a century in racing, vehicle sales and many other automobile-related activities.
But their latest battlegrounds have moved to actual battlefields and the U.S. energy grid.
Ford joined GM this year in seeking U.S. military contracts after the Trump administration approached U.S. companies about assisting the military with their expertise in mass manufacturing. The automakers' efforts so far are largely focused on military vehicles, but could grow with time.
Simultaneously, both companies are entering the energy storage system, or ESS, market amid an expected growing need related to rising consumer energy costs and data centers. Energy storage systems use a lot of the same underlying technology as electric vehicle batteries to store power for homes, businesses and even utilities.
Both markets are viewed by Wall Street analysts as new potential growth areas for the automakers. At one point, it was thought new opportunities might come from all-electric vehicles, but Ford and GM have since lost billions of dollars on those efforts.
"They're looking for new verticals," Morningstar senior equity analyst David Whiston told CNBC. "Ford's following GM's lead into defense, and energy makes a lot of sense because you have all this EV capacity that now you don't need. So instead of selling those factories, it's a way to try and capitalize on the data center boom."
The two markets are expected to be small portions of the companies' focus and revenue for the foreseeable future, but they could help the automakers diversify their operations and complement their core businesses as new vehicle sales slow in the U.S.
"It'll be hard to move the needle here massively, given the auto business's top line, but it certainly can be helpful," Whiston said.
The global ESS market is estimated to grow from $668.7 billion in 2024 to $5.12 trillion by 2034, according to research and consulting firm Global Market Insights. As part of that, the firm expects to see a significant expansion in the U.S.
"We're seeing this huge projection of growth, and it's already started growing," Devon Wilson, vice president of sales and marketing at LG Energy Solution's U.S. energy storage division, said during a recent event. "There's a massive amount of just fundamental electricity need within the country."
GM and Ford are attempting to capitalize on such expected growth to fill a void. The companies invested billions of dollars in plants to produce battery cells to meet EV demand that didn't 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 its partner LG Energy Solution for storage.
Long-term, GM could move further into ESS, including developing next-generation sodium-ion batteries with Denver-based startup Peak Energy. Kurt Kelty, GM's vice president of battery and sustainability, said he believes that technology can reshape grid-scale energy storage.
"We're developing the cells right now. The performance on 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 that we can contribute to."
GM also has a partnership with Redwood Materials for reusing its large EV batteries for energy storage systems. GM also offers EV charging and ESS for residential use through its energy unit.
