Ford is starting a battery storage business to power data centers and the grid

Amid Ford’s shift away from making large electric vehicles, the automaker is adding a new production line to find a home for its batteries.

Ford said Monday that rather than thwarting plans to build batteries for those vehicles, it will shift that capacity into a new battery storage business. These storage systems, which will use cheaper LFP batteries, will be used to power data centers and help reduce demand on the electrical grid.

Ford says the battery storage systems will begin shipping in 2027 and that the company plans to build 20 gigawatt-hours of annual capacity.

Ford is scheduled to invest about $2 billion in the new business over the next two years. Under the plan, Ford will reuse existing manufacturing capacity at its Kentucky plant. Ford plans to produce lithium iron phosphate batteries using technology licensed from China’s CATL, as well as battery energy storage system modules and 20-foot DC container systems at this facility.

Lisa Drake, Ford’s vice president of technology platforms and electric vehicle systems programs, said a “fantastic” opportunity for new business will be commercial network customers. Data centers will be secondary, Drake said, and then Ford expects to offer some home storage products.

“It was clear when we went out to market that the technology of choice for most of these customers was the prismatic type LSP container system,” Drake said during a call with reporters. “Given the fact that we already had a license to build this technology in the United States, combining that with our century-long manufacturing experience of large-scale manufacturing made a lot of sense as a natural adjacent for us.”

Ford’s BlueOval Battery Park of Michigan in Marshall, which is scheduled to begin production of LFP batteries in 2026, remains on track, the company said. LFP batteries, which also use CATL technology, will be used in Ford’s upcoming midsize electric truck. However, there will be one modification at the Michigan plant. It will also be used to manufacture smaller ampere-hour cells for use in residential energy storage solutions, Ford said.

Ford will join a number of automakers that are working in or planning to enter the battery storage space. Tesla has spent the past decade selling battery storage products and is deploying about 10 gigawatt-hours every three months. GM also has a residential and commercial line Battery storage products.