# GM and Ford Expand Rivalry into Defense and Energy Markets Automakers pivot to military contracts and energy storage amid slowing EV sales. - **Source:** [US Top News and Analysis](https://brifing.si/source/635540e9-943e-450d-ae52-ae0bfe3b67eb) - **Published:** 2026-09-05 - **Topic:** [Business](https://brifing.si/c/business) - **Original article:** - **On Brifing:** https://brifing.si/s/1b245065-1fc0-469b-8b12-b98ce6a6adb9 ## Century-Old Rivalry Expands General Motors and Ford, long-time competitors in the automotive industry, are now extending their rivalry into new sectors. Both companies are entering the defense and energy storage markets, marking a significant shift from their traditional focus. This move comes as they seek to diversify revenue streams amid slowing U.S. vehicle sales. The transition leverages their expertise in mass manufacturing and battery technology. ## Military Contracts as New Frontier GM and Ford are pursuing U.S. military contracts, with GM leading the charge since reviving its defense unit in 2017. GM recently secured a $1 billion contract to build infantry squad vehicles for the U.S. Army. Ford, following GM's lead, is also exploring defense opportunities. Analysts see this as a strategic move to capitalize on their manufacturing capabilities, though defense revenue remains a small fraction of their overall business for now. ## Energy Storage Market Boom Both automakers are entering the energy storage system (ESS) market, projected to grow from $668.7 billion in 2024 to $5.12 trillion by 2034. They aim to repurpose EV battery plants for ESS production, addressing unmet demand. GM partners with LG Energy Solution and Redwood Materials, while Ford plans a $2 billion investment to convert a Kentucky plant for ESS by 2027. This pivot helps mitigate losses from their struggling EV divisions. ## EV Struggles Drive Diversification Ford and GM have lost billions on EV investments as consumer demand fell short of expectations. Ford's Model e segment projects $4 billion losses by 2026. Their ESS and defense ventures offer alternative growth paths. Morgan Stanley notes Ford's ESS business could be a key profitability driver. Similarly, GM targets $700 million in defense revenue by 2026, viewing these sectors as complementary to core automotive operations. ## GM's Energy and Defense Push GM is developing next-generation sodium-ion batteries with startup Peak Energy for grid-scale storage. Its Ultium Cells joint venture produces batteries for LG Energy Solution's ESS products. GM also repurposes EV batteries through Redwood Materials and offers residential ESS solutions. On the defense side, GM works with Lockheed Martin and expects defense revenue to grow significantly by 2026, building a backlog of future contracts. ## Ford's Strategic ESS Investments Ford plans to allocate 20 gigawatt hours of production capacity to ESS by 2027, with a five-year agreement with EDF Power Solutions. It's converting a Kentucky battery plant for ESS production and dedicating Michigan factory space to residential storage. Analysts view this as an underappreciated opportunity to achieve profitability in Ford's EV business, with ESS expected to come online as a key turning point in 2027. ## Market Potential and Challenges While defense and ESS represent small portions of revenue currently, analysts see long-term growth potential. The U.S. Army values automakers' manufacturing scalability for military vehicles. The ESS market benefits from rising energy costs and data center demand. However, moving the needle significantly will be challenging given the automakers' massive automotive revenue bases. Success depends on execution and market adoption. ## Strategic Shift in Auto Industry GM and Ford's expansion into defense and energy storage reflects broader industry trends as automakers seek stability beyond cyclical vehicle sales. Their manufacturing expertise positions them well in these sectors, though profitability may take years. This diversification strategy could reshape the automotive landscape, with implications for competitors and suppliers. The moves highlight how traditional industries are adapting to technological and market shifts. ## Sources covering this story - https://www.cnbc.com/2026/09/05/gm-ford-defense-energy.html — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._