How Ford Is Becoming an AI Stock After the Wheels Fell Off Its EV Strategy
Key Points
Ford is dramatically shifting its EV strategy after a $19.5 billion write-down at the end of 2025.
The company will build energy storage systems for data centers, an AI pivot that's worked for Caterpillar.
It's a potential long-term catalyst in a market that could surpass $100 billion by 2030.
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Ford Motor Company (NYSE: F) made a huge bet on electric vehicles (EVs), but ultimately had to make changes following years of steep financial losses. In December 2025, Ford announced it was canceling several planned electric vehicle models and taking a $19.5 billion write-down.
Ford isn't quitting the EV market, but shifting its approach. The company is also repurposing one of its electric vehicle plants to build energy storage systems, making Ford a potential player in helping power data centers for artificial intelligence (AI).
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Here is what all these changes could mean for Ford stock.
Image source: The Motley Fool.
Ford isn't ditching EVs entirely
The problem with Ford's initial EV strategy was that it jumped in with both feet, but couldn't generate the sales volume quickly enough to turn its EVs profitable.
Ford hasn't completely quit EVs. It's developing a direct competitor for Tesla's popular Model 3 and Model Y. Beyond that, Ford is taking a less aggressive approach to EVs moving forward. It is shifting its focus from all-electric models to hybrids and extended-range EVs, which use an onboard combustion engine to power an electric motor that turns the wheels.
The company believes that these changes will make Ford's Model e business segment profitable by 2029. Investors should applaud Ford's willingness to make changes, rather than continue to incinerate capital. The EV business lost $4.8 billion in 2025 alone.
This new energy storage business isn't far-fetched at all
Ford plans to invest $2 billion over two years to scale production at a Kentucky plant to manufacture battery energy storage systems (BESS) for the data center market. The plant will manufacture LFP prismatic cells, battery energy storage system modules, and 20-foot DC container systems.
Power has become one of the primary constraints for artificial intelligence (AI) and data centers. It takes time and regulatory effort to expand the power generation and transmission infrastructure to support power-hungry data centers. As a result, data center operators are installing on-site generators and storage systems.
Caterpillar has leaned into this, and it's helped Power & Energy become its largest business segment. Ford aims to ramp up production to an annual rate of 20 gigawatt-hours worth of batteries by late 2027. Research from Markets and Markets indicates that the BESS industry will grow at a 15.8% annual rate, reaching $106 billion by 2030.
Ford won't see immediate returns from energy storage, but it could move the needle over time. It represents an outside-the-box growth catalyst for the longtime automotive manufacturer.
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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Caterpillar and Tesla. The Motley Fool has a disclosure policy.
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