TLDR
- Ford stock surged over 13% on Wednesday, making it the best performer in the S&P 500
- Morgan Stanley called Ford Energy an “underappreciated driver” of the Model e EV division’s path to profitability
- Ford Energy will deploy at least 20 gigawatt hours of battery storage annually, with first deliveries in late 2027
- Morgan Stanley sees Ford Energy generating up to $600 million in operating profit by 2030
- Ford’s CATL partnership gives it a strategic edge in meeting US compliance standards for energy storage tax credits
Ford Motor (F) stock surged more than 13% on Wednesday to around $13.56, making it the top performer in the S&P 500 for the day. The move came as investors zeroed in on the company’s newly announced energy storage business and a positive analyst note from Morgan Stanley.
Other automakers moved higher too, but nothing like Ford. General Motors rose 0.4%, Stellantis gained 2.7%, and Tesla added 3.9%.
The catalyst appears to be a Tuesday evening research note from Morgan Stanley analyst Andrew Percoco, who described Ford Energy as an “underappreciated driver of Model e path to profitability.” Ford’s EV arm, Model e, lost $4.8 billion in 2025.
Ford announced Ford Energy earlier this week. The business will supply US-assembled battery energy storage systems to utilities, data centers, and large commercial and industrial customers.
The concept is straightforward. The same lithium-ion batteries that power electric vehicles can store energy from solar and wind generation, helping stabilize power supply for large customers.
Ford plans to deploy at least 20 gigawatt hours of battery storage annually. First deliveries are expected in late 2027. For context, Tesla has deployed around 45 gigawatt hours of storage over the past 12 months.
Morgan Stanley Sees Real Earnings Potential
Percoco estimates Ford Energy could generate between $500 million and $600 million in run-rate operating profit at 20 gigawatt hours of capacity. He expects the unit to turn profitable by 2028 and hit nearly $600 million in operating profit by 2030.
That would be a meaningful addition. Ford is expected to generate roughly $9.5 billion in total operating profit in 2026, according to FactSet.
Morgan Stanley maintained a Hold rating on the stock with a $14 price target.
Percoco also suggested a supply deal could be coming. “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 wrote.
CATL Partnership Is a Key Piece
Ford plans to source batteries for the energy storage business from its Michigan plant, which uses licensed technology from CATL — the world’s largest lithium-ion battery maker.
Morgan Stanley flagged this as a competitive edge. Ford’s access to CATL’s lithium iron phosphate technology helps it meet Foreign Entity of Concern compliance requirements — a condition customers need to qualify for the 30% Investment Tax Credit tied to energy storage projects.
“We believe Ford’s relationship with CATL is an underappreciated strategic competitive advantage for its Energy Storage business,” Percoco wrote.
Ford initially announced a $2 billion investment into energy storage late last year. The move was met with skepticism at the time, partly because it came alongside a $20 billion write-down in its EV operations.
Wednesday’s rally suggests investors are taking a second look. Ford stock didn’t move when Ford Energy was first announced earlier this week — it took the Morgan Stanley note to get the market’s attention.
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