Ford announced on Monday it will repurpose battery production capacity at its Kentucky factory into a new battery storage business using lithium iron phosphate batteries licensed from China’s CATL to power data centers and buffer electric grid demand.
The automaker plans to shift capacity originally intended for large electric vehicles into this venture. Instead of abandoning battery manufacturing plans, Ford will produce storage systems at the existing Kentucky facility. These systems incorporate cheaper lithium iron phosphate, or LFP, batteries alongside battery energy-storage modules and 20-foot DC container systems. Production employs technology licensed from CATL, a major Chinese battery supplier.
Shipments of the first battery storage units will commence in 2027. Ford targets 20 gigawatt-hours of annual storage capacity. The company commits approximately $2 billion in investment over the next two years to establish and scale this business.
This move positions Ford alongside competitors already active in battery storage. Tesla has offered such products for the past decade and currently deploys about 10 gigawatt-hours every quarter. General Motors provides a lineup of home and commercial battery storage options.
Lisa Drake, Ford’s vice president of technology platform programs and EV systems, outlined market priorities during a call with reporters. She stated the predominant opportunity lies with commercial grid customers. Data-center operators represent a secondary focus, followed by home storage products.
Drake explained the technology selection process: “It was clear when we went out to the market that the technology of choice for most of these customers was an LSP prismatic type of container system.” She added context on Ford’s readiness: “And given the fact that we already had a license to build that technology in the U.S., you couple that with our manufacturing experience over a century of high scale manufacturing, it just made a lot of sense as a natural adjacency for us.”
The LSP prismatic container system aligns with customer preferences identified through market research. Ford’s century-long expertise in high-volume manufacturing underpins the production strategy at the Kentucky plant, which will handle LFP batteries, energy-storage modules, and container systems without new facility construction.
