Key Takeaways
- Shares of Ford climbed more than 13% on Wednesday, leading all S&P 500 stocks
- Analyst firm Morgan Stanley identified Ford Energy as an overlooked catalyst for the Model e electric vehicle unit’s profitability
- The new energy storage venture aims to deploy a minimum of 20 gigawatt hours of battery capacity each year, starting deliveries in late 2027
- Morgan Stanley analysts project Ford Energy could contribute as much as $600 million in operating earnings by decade’s end
- The company’s collaboration with CATL positions Ford favorably to meet U.S. regulatory requirements for energy storage incentives
Shares of Ford Motor (F) climbed over 13% during Wednesday’s trading session, reaching approximately $13.56 and claiming the title of best-performing stock in the S&P 500 index. The dramatic uptick followed investor enthusiasm around the automaker’s recently unveiled energy storage venture and encouraging analyst commentary from Morgan Stanley.
While other automotive manufacturers experienced modest gains, none matched Ford’s momentum. General Motors increased 0.4%, Stellantis climbed 2.7%, and Tesla advanced 3.9%.
The primary driver appears to be research published Tuesday evening by Morgan Stanley analyst Andrew Percoco, who characterized Ford Energy as an overlooked factor in the “Model e path to profitability.” Ford’s electric vehicle division, Model e, recorded losses totaling $4.8 billion throughout 2025.
Ford unveiled Ford Energy just days ago. This new division will manufacture U.S.-assembled battery energy storage solutions for utility companies, data center operators, and major commercial and industrial clients.
The business model is simple. Lithium-ion battery technology identical to that used in electric vehicles can capture energy generated by renewable sources like solar and wind, providing grid stability for enterprise-scale customers.
The automaker intends to roll out no less than 20 gigawatt hours of storage capacity per year. Initial customer shipments are scheduled for late 2027. By comparison, Tesla has installed approximately 45 gigawatt hours of storage systems in the trailing twelve months.
Analysts Project Substantial Profit Contribution
Percoco’s analysis suggests Ford Energy has the potential to produce between $500 million and $600 million in annual operating earnings once 20 gigawatt hours of capacity is achieved. His timeline anticipates the division reaching profitability by 2028 and approaching $600 million in operating profit by 2030.
This represents a significant opportunity. Ford is projected to deliver approximately $9.5 billion in total operating profit during 2026, based on FactSet consensus estimates.
Morgan Stanley kept its Hold rating intact while maintaining a $14 price objective on shares.
Percoco also hinted at potential customer announcements. “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 Alliance Provides Strategic Advantage
Ford intends to obtain batteries for its energy storage operations from its Michigan manufacturing facility, which utilizes licensed battery technology from CATL — the global leader in lithium-ion battery production.
Morgan Stanley identified this arrangement as a differentiating factor. Ford’s partnership with CATL and access to lithium iron phosphate battery technology enables compliance with Foreign Entity of Concern regulations — a critical requirement for customers seeking to claim 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 noted in his analysis.
Ford originally disclosed a $2 billion commitment to energy storage late last year. Market reaction was initially muted, partially because the announcement coincided with a $20 billion impairment charge related to its electric vehicle business.
Wednesday’s price surge indicates investors are reassessing the opportunity. Ford shares showed little movement when Ford Energy was first introduced earlier in the week — the Morgan Stanley research appears to have catalyzed renewed investor interest.
