GM vs. Ford: U.S. defense, energy sectors add to automakers' century-old rivalry

General Motors and Ford Motor are expanding their century-old rivalry into new sectors, specifically the U.S. defense industry and the energy storage system (ESS) market. Both automakers are seeking U.S. military contracts, primarily for vehicles, following a Trump administration initiative to leverage their mass manufacturing expertise.

Simultaneously, GM and Ford are entering the ESS market, an area they view as a significant growth opportunity. This move is prompted by rising consumer energy costs and the increasing energy demands of data centers, which are creating a "data center boom." The global ESS market is projected to grow substantially from $668.7 billion in 2024 to $5.12 trillion by 2034.

Both companies had previously invested billions in EV battery production, facing losses due to unmet demand. They are now repurposing this capacity for ESS. Ford plans to invest $2 billion in its energy business, converting a Kentucky battery factory and dedicating space in a Marshall, Michigan factory for residential storage units by late 2027. GM's energy business, while not yet offering its own ESS, has a military division that does, and its Ultium Cells joint venture in Tennessee produces cells for LG Energy Solution's storage products. GM is also developing next-generation sodium-ion batteries with Denver-based Peak Energy and partnering with Redwood Materials for battery reuse.

Analysts see these new ventures as crucial for diversifying operations and complementing core businesses amidst slowing new vehicle sales. While the defense and ESS markets are expected to be small portions of revenue initially, they offer strategic growth areas.