Makers of electric-vehicle batteries are pivoting to make energy storage for data centers and utilities, including the likes of Ford Motor.
Battery manufacturers made significant investments in the U.S. in recent years, buoyed by policy support for EVs. That changed when President Trump’s administration took away carrots incentivizing EV buyers and did away with sticks that punished automakers for making gas-guzzlers. Benchmark Mineral Intelligence expects energy storage to make up 41% of total U.S. battery demand this year, up from 26% two years ago.
At the same time, there are clear incentives to make grid-scale batteries in the U.S. Even though Trump’s signature One Big, Beautiful Bill Act took away tax credits for solar and wind, subsidies remain for energy storage as long as the equipment doesn’t contain too much content from China. Chinese-made batteries themselves face high tariffs.
The Iran war’s destabilizing impact on fossil-fuel markets could be yet another catalyst for data centers to consider batteries over diesel or natural-gas-fired power. While higher gas prices could boost the appeal of EVs, the policy challenges they face in the U.S. make hybrids a more likely beneficiary for the foreseeable future.
Two deals announced this week illustrate the shift. LG Energy Solution, the battery-making unit of Korean conglomerate LG, said it would produce battery cells for Tesla’s energy-storage business out of a Michigan factory that was once meant for General Motors’ EV batteries. The factory is expected to cost $4.3 billion. Samsung, another Korean energy storage maker, announced a $1 billion deal to supply batteries to an undisclosed American energy company out of its Stellantis joint-venture factory in Indiana.
Others making this change include Ford, which plans to invest $2 billion between 2026 and 2027 to repurpose its EV battery manufacturing capacity in Kentucky. Japanese battery manufacturer AESC has retooled a Tennessee factory that used to make batteries for the Nissan Leaf.
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