General Motors and Ford are expanding into military vehicle manufacturing and energy storage systems to offset slowing U.S. auto sales and heavy electric vehicle losses, according to financial reporting and industry analysts tracking the two Detroit automakers.
General Motors and Ford Motor have competed for more than a century across vehicle sales, racing, and commercial markets.
The push into defense procurement and energy storage comes as U.S. auto sales growth slows and heavy investments in electric vehicles continue to pressure automaker balance sheets. Both companies sank billions of dollars into dedicated EV plants to meet consumer demand that ultimately failed to materialize at expected volumes, according to financial reporting.
U.S. Defense Contracts Draw Detroit Back to Military Manufacturing
Ford joined GM this year in seeking U.S. military contracts after the Trump administration approached domestic companies about assisting the armed forces with their mass-manufacturing expertise. While current efforts focus largely on military vehicles, analysts note the scope could widen over time.
General Motors holds a more established footprint in the defense sector, having revived its specialized defense unit in 2017 after a 14-year hiatus. The vehicle is engineered to military specifications and based on the Chevrolet Colorado ZR2 midsize truck architecture. GM expects its 2026 defense revenue to reach nearly $700 million and is targeting positive earnings before interest and tax in the division this year.
Ford has released fewer specific details regarding domestic defense plans, but the company announced a partnership with General Dynamics Land Systems and Ricardo to compete for a next-generation vehicle under the UK Ministry of Defence’s Light Mobility Vehicle program.
Energy Storage Systems Target the Data Center Boom
Alongside defense pursuits, both automakers are entering the fast-growing energy storage system market. These systems utilize underlying battery technology similar to electric vehicles to store power for homes, commercial businesses, and utilities, capitalizing on rising consumer energy costs and surging electricity demand from data centers.
Ford’s following GM’s lead into defense, and energy makes a lot of sense because you have all this EV capacity that now you don’t need. So instead of selling those factories, it’s a way to try and capitalize on the data center boom,
said Morningstar senior equity analyst David Whiston.
Ford announced plans to spend $2 billion to launch a dedicated energy business. The strategy involves converting a Kentucky battery factory built alongside partner SK On to produce energy storage units by late 2027. Ford also plans to dedicate part of its Marshall, Michigan, BlueOval Battery Park factory to producing cells for residential storage. Ford Energy operates under the company’s Model e electric vehicle segment, which has guided for $4 billion in losses in 2026 before reaching breakeven by 2029, anchored by the 2027 launch of its ESS operations.
General Motors does not currently offer a branded standalone energy storage system, though its Ultium Cells joint venture in Tennessee produces cells supplied to partner LG Energy Solution for storage applications. GM also maintains a partnership with Redwood Materials to reuse large EV batteries for energy storage, and operates an energy unit providing residential EV charging and storage options. Long-term, GM is exploring next-generation sodium-ion battery technology through a collaboration with Denver-based startup Peak Energy.
Financial Impact and Strategic Diversification
Wall Street analysts view both the defense and energy storage expansions as smart ways to utilize excess production capacity rather than immediate transformations for corporate balance sheets.
It’ll be hard to move the needle here massively, given the auto business’s top line, but it certainly can be helpful,
Whiston said regarding the new revenue verticals.
Morgan Stanley analyst Andrew Percoco noted in a June investor note that investors see value in Ford’s ESS business, describing it as an underappreciated driver toward profitability for the company’s electric vehicle operations. Meanwhile, GM CEO Mary Barra told investors that the company’s defense unit should mature into a more meaningful and diversified contributor to overall earnings over time as backlog orders expand.
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