Investor enthusiasm propelled Ford Motor Co. shares higher by 13% on Wednesday, marking the company's largest one-day uptick in about six years. The surge followed a Morgan Stanley research note that amplified details Ford provided earlier in the week about its new energy storage initiative.
Ford announced a wholly-owned energy subsidiary late last year and appointed Lisa Drake to lead the effort. Drake has been a prominent executive in Ford's electric vehicle initiatives. Company communications revealed that the new business will repurpose manufacturing capacity in Kentucky that had previously been intended for EV battery production.
Among the operational specifics shared, Ford said it will build energy storage products using LFP prismatic battery technology - an iron-based chemistry - designed for customers such as data centers, utilities and large-scale industrial and commercial operations. The company expects to deploy at least 20 GWh annually once the business is underway.
Ford disclosed that it is investing $2 billion into the endeavor and plans for first customer deliveries in late 2027. The formation of the unit follows a $19.5 billion writedown the company took on its EV programs in December.
Morgan Stanley analysts highlighted Ford's agreement to license battery technology from CATL, a Chinese battery manufacturer, as a strategic strength. The analysts wrote that they "believe Ford’s relationship with CATL is an underappreciated strategic competitive advantage," and said they expect Ford to sign supply agreements with large commercial customers over the coming months.
Separately, a third-party investment analytics product mentioned in the company's communications evaluates Ford against thousands of other companies using over 100 financial metrics. That product states it applies AI-driven analysis to assess fundamentals, momentum and valuation and cited past examples of successful stock picks, while offering to indicate whether Ford features in its strategies.
In sum, the market reaction reflects investor focus on Ford's pivot to energy storage, the licensing arrangement with CATL, and the company's stated investment and deployment targets. Execution of the plan, customer contracts and the timing of deliveries remain factors investors will monitor as the business develops.