Ford Motor Co. shares rose 6% on Wednesday after a Morgan Stanley analyst underscored the potential of the automaker’s energy storage arm to improve profitability within its Model e electric vehicle operations.
Andrew S. Percoco of Morgan Stanley characterized Ford Energy as an underappreciated competitive advantage driven by a licensing agreement with Chinese battery maker CATL. Percoco said the deal positions Ford as one of a small number of semi-vertically integrated, domestic energy storage system suppliers in the United States.
"We believe Ford’s relationship with CATL is an underappreciated strategic competitive advantage for its Energy Storage business," Percoco said. "Through this relationship, Ford becomes a key supplier of compliant ESS systems to utility and data center customers in the US."
Percoco highlighted Ford’s access to CATL’s lithium iron phosphate technology, noting it places the company in a distinctive position to meet Foreign Entity of Concern compliance requirements. Those requirements are, the analyst said, necessary for customers to qualify for the 30% Investment Tax Credit on energy storage projects.
Morgan Stanley estimated that Ford Energy could deliver between $500 million and $600 million of run-rate EBIT at a production scale of 20 gigawatt hours. The analyst also indicated the firm expects Ford to announce energy storage supply agreements with large commercial customers and hyperscalers in the coming months.
The company disclosed a $2 billion investment into its energy storage business late last year. That commitment drew skepticism at the time, the analyst noted, in part because it coincided with a $20 billion write-down related to Ford’s electric vehicle business.
Market data cited alongside the analysis showed Ford shares have declined 2.75% year-to-date, even after the intraday gains tied to the Morgan Stanley commentary.
This development has drawn attention to the intersection of automotive manufacturing, utility-scale energy storage and data center infrastructure, as investors and analysts reassess Ford’s positioning beyond vehicle assembly.