Ford (F) Stock Jumps 13% on Energy Storage Business Optimism

Key Takeaways

Table of Contents

Ford shares jumped more than 13% on Wednesday, leading all S&P 500 stocks
Morgan Stanley analysts identified Ford Energy as a significantly overlooked catalyst for the Model e division’s profitability trajectory
The company targets annual deployment of at least 20 gigawatt hours in battery storage capacity, with initial shipments scheduled for late 2027
Analysts project Ford Energy could deliver operating profits reaching $600 million by the end of the decade
The company’s collaboration with CATL provides a competitive advantage in satisfying US regulatory requirements for energy storage incentives

Shares of Ford Motor (F) rocketed more than 13% higher on Wednesday, reaching approximately $13.56 and claiming the position as the S&P 500’s strongest performer for the trading session. The dramatic rally followed renewed investor interest in the automaker’s recently unveiled energy storage venture and an encouraging research report from Morgan Stanley.

Ford Motor Company, F

While other automotive manufacturers posted gains, none matched Ford’s explosive performance. General Motors climbed 0.4%, Stellantis advanced 2.7%, and Tesla posted a 3.9% increase.

The primary driver appears to be a research note published Tuesday evening by Morgan Stanley analyst Andrew Percoco, who characterized Ford Energy as a significantly “underappreciated driver of Model e path to profitability.” The automaker’s electric vehicle segment, Model e, recorded losses totaling $4.8 billion throughout 2025.

Ford unveiled Ford Energy just days earlier this week. The new division will manufacture and deliver battery energy storage solutions assembled in the United States to utility companies, data center operators, and major commercial and industrial clients.

The underlying premise is relatively simple. The identical lithium-ion battery technology powering electric vehicles can capture and store electricity generated from renewable sources like solar and wind, providing grid stability and reliable power supply for enterprise-scale customers.

The automaker intends to roll out a minimum of 20 gigawatt hours worth of battery storage capacity each year. Initial customer deliveries are slated for late 2027. By comparison, Tesla has installed approximately 45 gigawatt hours of storage capacity during the trailing twelve months.

Wall Street Analysts Project Substantial Profit Margins

Percoco’s financial modeling suggests Ford Energy has the potential to produce between $500 million and $600 million in steady-state operating profit once it achieves 20 gigawatt hours of annual capacity. His analysis anticipates the business unit will achieve profitability by 2028 and approach $600 million in operating profit by 2030.

This would represent a significant contribution to the company’s bottom line. Ford is projected to generate approximately $9.5 billion in total operating profit during 2026, based on FactSet consensus estimates.

Morgan Stanley kept its Hold rating on Ford shares while maintaining a $14 price objective.

Percoco also indicated a major supply agreement might be imminent. “We believe that there is a fairly high likelihood that Ford signs an energy storage system supply agreement with large commercial customers, and potentially hyperscalers, over the next few months,” his report stated.

CATL Collaboration Provides Strategic Advantage

Ford intends to obtain batteries for its energy storage operations from its Michigan manufacturing facility, which operates under licensed technology from CATL — the global leader in lithium-ion battery production.

Morgan Stanley identified this arrangement as a significant competitive differentiator. Ford’s ability to leverage CATL’s lithium iron phosphate battery technology enables compliance with Foreign Entity of Concern regulations — a critical requirement for customers seeking to qualify for the 30% Investment Tax Credit available for energy storage installations.

“We believe Ford’s relationship with CATL is an underappreciated strategic competitive advantage for its Energy Storage business,” Percoco stated in his analysis.

Ford originally disclosed a $2 billion capital commitment to energy storage late last year. The announcement was initially received with doubt by market participants, partially because it coincided with a $20 billion impairment charge related to its electric vehicle operations.

Wednesday’s substantial price movement indicates investors are reassessing the opportunity. Ford shares showed minimal reaction when Ford Energy was first revealed earlier in the week — it required Morgan Stanley’s detailed analysis to capture the market’s focus.

✨ Limited Time Offer