Automakers Pivot to Battery Storage as EV Demand Shifts

Ford, GM, and others redirect excess battery capacity to power grid and data centers

Apr. 16, 2026 at 6:06pm

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An extreme close-up photograph of the pebbled, metallic surface of a lithium-ion battery cell, dramatically lit to reveal the intricate engineering and raw materials that make up the core of modern energy storage technology.Automakers are repurposing their excess battery production capacity to build stationary energy storage systems for the power grid and data centers.Today in Nashville

With lower-than-expected demand for new electric vehicles, automakers like Ford and GM are now repurposing their excess battery manufacturing capacity to build stationary battery energy storage systems (BESS). These BESS units are being adopted by AI data centers and critical infrastructure to help manage power loads and costs. While this pivot requires additional investment, it allows automakers to make the most of their existing battery production capabilities.

Why it matters

The shift to BESS represents a smart strategic move by automakers to capitalize on their existing battery manufacturing infrastructure and expertise, rather than simply writing down those investments. As renewable energy and AI-powered data centers drive growing demand for grid-scale energy storage, automakers are well-positioned to become major players in this emerging market.

The details

Automakers had planned for around 275 gigawatt-hours of battery capacity, but current U.S. battery demand is only expected to reach 182 GWh this year, with just 37% of that going to the BESS market. This excess capacity has led Ford, GM, and others to retool factories and retrain workers to pivot towards building BESS units, which have different chemistry and design requirements than EV batteries. While not a simple transition, it allows them to monetize their existing investments.

  • In December 2025, Ford announced it would transition its Kentucky factory to build BESS packs.
  • GM said in early 2026 that its Ultium Cells plant in Nashville would also shift to producing BESS solutions, investing $70 million to retool and retrain workers.

The players

Ford

An American automaker that is repurposing factory space in Kentucky to build battery energy storage systems.

GM

An American automaker that is transitioning its Ultium Cells plant in Nashville to produce battery storage solutions, investing $70 million to retool and retrain workers.

SK On

Ford's battery manufacturing partner that will take over the company's second plant in Tennessee.

LG Energy Solution

GM's battery partner, with whom it has a $2.3 billion joint venture for battery production.

Benchmark Mineral Intelligence

A data and intelligence firm that provided analysis on automakers' planned battery production capacity.

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What’s next

As automakers continue to retool their factories and train workers for the BESS market, it will be important to monitor how quickly they are able to ramp up production and secure contracts with data centers, utilities, and other potential customers. The success of this pivot could have major implications for the future of the auto industry's battery manufacturing capabilities.

The takeaway

This shift by automakers to repurpose excess battery capacity for grid-scale energy storage represents an innovative and strategic response to changing market conditions. By leveraging their existing infrastructure and expertise, they are able to generate value from investments that may have otherwise gone to waste, while also supporting the growing need for reliable energy storage solutions.