Asger Risom
For Ford, the future of electrification may now be less about cars and more about powering the machines behind the AI boom.
Ford is rethinking its future as shifting consumer demand and a surging appetite for artificial intelligence collide. After years of heavy investment in electric vehicles, the automaker is now betting that a different kind of electrification offers a clearer path forward.
The change marks one of the most significant strategic turns for the company in decades.
EV rethink
Ford said on Monday that it is pulling back from parts of its electric vehicle strategy, a move it estimates will cost the company $19.5 billion. The decision includes cancelling some planned electric models and leaning more heavily into hybrids as demand for fully electric cars cools in the US.
Ford CEO Jim Farley said the shift reflects changing consumer behavior. “The EV market in the US went from 12% of the industry to only five, and that really, in the end, was the big decider for us,” he told Bloomberg, adding that “the customer changing their decision” forced the rethink.
The slowdown follows a rush by buyers to take advantage of a $7,500 federal tax credit before it expired in September, after which demand fell sharply.
Factory repurposed
Alongside scaling back EV ambitions, Ford said it will convert an electric vehicle battery factory in Glendale, Kentucky, to produce large-scale energy storage systems. The plant, built through a joint venture with South Korean battery maker SK On, will now focus on supplying batteries for data centers and energy infrastructure.
Ford said it will invest $2 billion to grow the new business, using what it described as underutilized EV battery capacity. The company aims to deploy at least 20 gigawatt-hours of energy storage by the end of 2027, roughly equivalent to the annual electricity use of about 2,000 US homes.
A separate battery plant in Michigan will be used to manufacture smaller storage units for residential customers.
Riding the AI wave
The move comes as demand for AI computing drives a data center construction boom across the US, putting growing strain on the power grid. Federal estimates suggest electricity demand from data centers could triple within three years as companies such as Meta, Microsoft and OpenAI expand their AI infrastructure.
By shifting into energy storage, Ford is positioning itself to serve that expanding market, turning a setback in its EV plans into an opportunity tied to AI growth.
Tesla comparison
Ford’s strategy mirrors a path already taken by Tesla. Elon Musk’s company has built a lucrative energy storage business alongside its car sales, generating more than $10 billion last year from batteries used to support power grids and homes.
Tesla’s Megapack systems have also been deployed at major AI facilities, including xAI’s “Colossus” supercomputer site in Memphis, Tennessee, where hundreds of units have been used to stabilize electricity supply.
A broader reset
Ford’s push into battery storage underscores how rapidly priorities are shifting across the auto industry. As enthusiasm for EVs cools and AI infrastructure expands, automakers are reassessing where their technology and factories can deliver the strongest returns.
For Ford, the future of electrification may now be less about cars and more about powering the machines behind the AI boom.
Ford is rethinking its future as shifting consumer demand and a surging appetite for artificial intelligence collide. After years of heavy investment in electric vehicles, the automaker is now betting that a different kind of electrification offers a clearer path forward.
The change marks one of the perhaps most significant strategic turns for the company in decades.
EV rethink
Ford said on Monday that it is pulling back from parts of its electric vehicle strategy, a move it estimates will cost the company $19.5 billion. The decision includes cancelling some planned electric models and leaning more heavily into hybrids as demand for fully electric cars cools in the US.
Ford CEO Jim Farley said the shift reflects changing consumer behavior. “The EV market in the US went from 12% of the industry to only five, and that really, in the end, was the big decider for us,” he told Bloomberg, adding that “the customer changing their decision” forced the rethink.
The slowdown follows a rush by buyers to take advantage of a $7,500 federal tax credit before it expired in September, after which demand fell sharply.
Factory repurposed
Alongside scaling back EV ambitions, Ford said it will convert an electric vehicle battery factory in Glendale, Kentucky, to produce large-scale energy storage systems. The plant, built through a joint venture with South Korean battery maker SK On, will now focus on supplying batteries for data centers and energy infrastructure.
Ford said it will invest $2 billion to grow the new business, using what it described as underutilized EV battery capacity. The company aims to deploy at least 20 gigawatt-hours of energy storage by the end of 2027, roughly equivalent to the annual electricity use of about 2,000 US homes.
A separate battery plant in Michigan will be used to manufacture smaller storage units for residential customers.
Riding the AI wave
The move comes as demand for AI computing drives a data center construction boom across the US, putting growing strain on the power grid. Federal estimates suggest electricity demand from data centers could triple within three years as companies such as Meta, Microsoft and OpenAI expand their AI infrastructure.
By shifting into energy storage, Ford is positioning itself to serve that expanding market, turning a setback in its EV plans into an opportunity tied to AI growth.
Tesla comparison
Ford’s strategy mirrors a path already taken by Tesla. Elon Musk’s company has built a lucrative energy storage business alongside its car sales, generating more than $10 billion last year from batteries used to support power grids and homes.
Tesla’s Megapack systems have also been deployed at major AI facilities, including xAI’s “Colossus” supercomputer site in Memphis, Tennessee, where hundreds of units have been used to stabilize electricity supply.
A broader reset
Ford’s push into battery storage underscores how rapidly priorities are shifting across the auto industry. As enthusiasm for EVs cools and AI infrastructure expands, automakers are reassessing where their technology and factories can deliver the strongest returns.
For Ford, the future of electrification may now be less about cars and more about powering the machines behind the AI boom.
Sources: Ford, Bloomberg
