Name: Why Automakers Want To Power AI Data Centers
Uploaded: 2026-01-25T16:22:26.000Z
Duration: 3 min 41 s
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Ford just announced it's going to be making a $2 billion bet on a totally new industry.

That comes as automakers pivot away from EVs weaker sales and lowered forecasts are leading companies to find new uses for the battery factories they invested billions of dollars into.

Energy storage is a natural next best option.

Big battery packs that store power for homes, businesses, and even utilities.

They can collect electricity from, say, solar panels for use when the sun isn't shining.

Or they can draw power from the grid at night when rates are lower.

Some carmakers have been investing in this for at least a decade, but

others, like Ford and gm, have made big announcements in just the last several months.

Electricity demand is rising, and the still pretty new energy storage market is growing.

Tesla's EV sales fell for the second year in a row in 2025, but

In the quarter of 2025, it was the company's biggest growth driver.

Sales jumped 44% over the previous year, and overall we're about a quarter of Tesla's total.

The company does technically group storage with its solar business, but

said the sales jump was primarily due to the introduction of new storage products.

Tesla Energy punches above its weight in profits, too.

Gross margins are about 30%, roughly double what Tesla makes on its cars.

There's a few reasons why energy storage demand might continue to rise.

Electricity utilities could become a growing customer base.

Some states even require them to buy storage batteries.

This is already the case in California, and other states are following its lead.

Some automakers are also anticipating a lot of demand from commercial customers.

When GM and Redwood Materials announced their plans to use both new and used batteries for storage, they explained explicitly cited exploding energy demand from AI data centers.

Companies that invest in US Energy storage production also now benefit from changes to federal tax law that effectively restrict products from China.

The global leader, Ford is repurposing an EV battery plant in Kentucky to make components for commercial energy storage.

Its Michigan plant will make smaller residential storage packs alongside the batteries for its upcoming electric truck.

The automaker has already sunk nearly $10 billion into the two plants.

Now it plans to invest another 2 billion into this growing energy business.

GM did not respond to a request for comment, And Ford declined CNBC's request for an interview.

First, this is completely different from manufacturing cars.

The customer and how you need to market and sell these products is going to look different compared to what a company like.

Take GM as an example, is accustomed to doing.

It's going to be tough, but I think it is a good idea.

Second, with all these companies, jumping in, the field is liable to get crowded.

Third, it's unclear if some of these projected sources of demand, such as AI data centers, will actually pan out.

And lastly, storage and EV batteries are similar, but

different enough that switching from one to the other takes more than a snap of the fingers.

And the EV battery market is still about three times larger than storage.

So if the storage bet doesn't pay off or EV demand takes off again, these companies might find themselves in the same bind.

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Why Automakers Want To Power AI Data Centers

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