Shares of Ford Motor Company have surged to their highest level in nearly three years as investors grow excited about the automaker’s new energy-storage business tied to the booming artificial intelligence industry.
Its stock has jumped 28% over the past two weeks after the company launched Ford Energy with a $2 billion investment.
AI demand drives new strategy
Ford Energy plans to repurpose batteries originally built for electric vehicles into stationary energy-storage systems for AI data centers, power utilities, and industrial customers. The strategy allows Ford to tap into rapidly growing electricity demand across the United States as AI companies expand their data center operations.
The move places Ford in competition with companies such as Tesla and LG Energy Solution.
Investors are especially optimistic about Ford’s partnership with Chinese battery giant Contemporary Amperex Technology Co. Limited, or CATL, the world’s largest battery maker.
Analysts say CATL’s low-cost battery technology could give Ford a major advantage in the fast-growing energy-storage market.
Auto industry faces challenges
Ford’s shift into energy comes as automakers struggle with slowing electric-vehicle demand, rising production costs, and weaker new-car sales. Higher oil prices linked to tensions in Iran have also increased concerns about consumer spending on large gas-powered vehicles.
Meanwhile, Ford continues to face pressure to boost production of its profitable F-Series trucks while dealing with rising aluminum costs.
Ford Energy plans to deploy at least 20 gigawatt-hours of battery storage systems annually. The company has already secured a deal with energy company EDF to supply up to 4 gigawatt-hours per year, beginning in 2028.
Analysts say Ford now needs more large contracts to prove the business can deliver long-term growth.