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GM and Ford Pivot to Defense and Energy Storage to Diversify Revenue Streams
Consumer Durables · Motor Vehicles · cnbc · 2026-09-05
MORN, REDWOO.FG, GM, F, ITA, IYJ, IDRV, TAN, LMT, SPY
Facing slowing vehicle sales, General Motors and Ford are expanding into military contracts and energy storage systems to leverage their existing manufacturing capacity.
What Happened
Strategic Diversification Efforts: General Motors and Ford are aggressively expanding into the defense and energy storage sectors to mitigate slowing domestic vehicle sales. By leveraging their massive manufacturing infrastructure, both companies aim to capitalize on new verticals that complement their core automotive businesses.
Defense Industry Expansion: GM has significantly outpaced Ford in the defense sector, recently securing a contract with the U.S. Army for infantry squad vehicles that could exceed $1 billion. Ford is now attempting to catch up, recently announcing a partnership with General Dynamics to compete for military vehicle programs in the United Kingdom.
Energy Storage Market Potential: Both automakers are entering the energy storage system (ESS) market, viewing it as a critical opportunity to utilize battery production capacity originally intended for electric vehicles. Ford plans to invest $2 billion to convert a battery factory for energy storage production by 2027, while GM is exploring next-generation sodium-ion battery technology.
Market Outlook and Challenges: While analysts note that these new ventures are unlikely to move the needle on total revenue in the near term, they provide essential diversification. Management teams at both companies emphasize that these efforts are long-term plays to build resilience and profitability in an evolving economic landscape.