Key Takeaways
- Shares of Ford climbed more than 13% on Wednesday, leading all S&P 500 gainers
- Morgan Stanley described Ford Energy as an overlooked catalyst for Model e’s profitability turnaround
- The company plans to roll out a minimum of 20 gigawatt hours of battery storage each year, starting late 2027
- Analysts project Ford Energy could deliver up to $600 million in operating earnings by decade’s end
- The automaker’s collaboration with CATL provides a competitive advantage for securing energy storage tax incentives
Shares of Ford Motor (F) skyrocketed over 13% during Wednesday’s trading session, reaching approximately $13.56 and claiming the title of the S&P 500’s strongest performer. The rally followed heightened investor interest in the automaker’s recently unveiled energy storage venture and favorable analyst commentary from Morgan Stanley.
While other automotive manufacturers posted gains, none came close to matching Ford’s performance. General Motors edged up 0.4%, Stellantis advanced 2.7%, and Tesla climbed 3.9%.
The driving force behind the surge appears to be a research report released Tuesday evening by Morgan Stanley’s Andrew Percoco, who characterized Ford Energy as an overlooked catalyst in Model e’s journey toward profitability. The company’s electric vehicle division, Model e, reported losses of $4.8 billion in 2025.
Ford unveiled Ford Energy just days ago. This new venture will deliver domestically manufactured battery energy storage solutions to utility companies, data center operators, and major commercial and industrial clients.
The business model is simple. Lithium-ion battery technology identical to what powers electric vehicles can capture electricity from renewable sources like solar and wind, providing grid stability for large-scale customers.
The automaker intends to roll out no less than 20 gigawatt hours of battery storage capacity per year. Initial shipments should arrive in late 2027. As a reference point, Tesla has installed approximately 45 gigawatt hours of storage capacity over the trailing twelve months.
Wall Street Analysts See Substantial Profit Margins
Percoco’s analysis suggests Ford Energy has the potential to produce between $500 million and $600 million in steady-state operating earnings at 20 gigawatt hours of annual capacity. His projections indicate the division will achieve profitability by 2028 and approach $600 million in operating profit by 2030.
This represents a significant contribution. Ford is forecast to produce approximately $9.5 billion in consolidated operating profit during 2026, based on FactSet consensus estimates.
Morgan Stanley kept its Hold recommendation on the shares with a $14 price objective.
Percoco also hinted at potential supply agreements on the horizon. “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,” he noted in the report.
CATL Alliance Provides Strategic Advantage
Ford intends to obtain batteries for its energy storage operation from its Michigan manufacturing facility, which operates under licensed technology from CATL — the globe’s largest producer of lithium-ion batteries.
Morgan Stanley identified this relationship as a strategic differentiator. Ford’s utilization of 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 associated with energy storage installations.
“We believe Ford’s relationship with CATL is an underappreciated strategic competitive advantage for its Energy Storage business,” Percoco stated.
Ford originally disclosed a $2 billion capital commitment to energy storage in late 2024. The announcement received a lukewarm reception initially, in part because it coincided with a $20 billion impairment charge related to its electric vehicle operations.
Wednesday’s stock performance indicates investors are reassessing the opportunity. Shares remained flat when Ford Energy was initially announced earlier in the week — it required Morgan Stanley’s analytical perspective to spark market enthusiasm.
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