GM vs. Ford: U.S. Defense, Energy Sectors Add to Automakers' Century-Old Rivalry

 GM vs. Ford: U.S. Defense, Energy Sectors Add to Automakers' Century-Old Rivalry

**Detroit's crosstown rivals are taking their battle beyond the showroom floor, competing for lucrative U.S. military contracts and a slice of the booming energy storage market as EV ambitions hit a wall.**

For more than a century, General Motors and Ford have waged war on the asphalt—racing for supremacy in sales, performance, and consumer loyalty. But as the internal combustion engine gives way to an uncertain electrified future, America's two largest automakers are seeking new battlegrounds. Their latest clash is playing out not on the streets of Detroit, but on actual battlefields and across the nation's stressed power grid.

Both companies are pivoting to defense contracting and grid-scale energy storage, betting that their manufacturing prowess and battery expertise can be repurposed beyond passenger vehicles.It's a strategic retreat from an EV revolution that has cost them billions, and a high-stakes gamble to find new growth verticals in an era of slowing auto sales.

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## The EV Hangover: Why Diversification Became a Necessity

The pivot to defense and energy is born from necessity. Ford and GM have each lost billions of dollars on their electric vehicle initiatives, with demand failing to meet the ambitious projections that justified massive factory investments.Ford's Model e division alone is projected to lose $4 billion in 2026. With new vehicle sales slowing in the U.S., the automakers are scrambling to find new uses for the factories and battery capacity they built for a fully electric future that has yet to arrive.

"They're looking for new verticals," said David Whiston, senior equity analyst at Morningstar. "Ford's following GM's lead into defense, and energy makes a lot of sense because you have all this EV capacity that now you don't need."

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## The New Battlefield: A $1 Billion Military Truck Contract

### Ford Ends 36-Year Hiatus from Defense

In a dramatic return to the defense sector after a 36-year absence, Ford has secured a contract to develop prototypes for the U.S. Army's next-generation tactical vehicle program.The Dearborn-based automaker is competing for what it describes as its largest military contract opportunity since the Cold War era.

The Pentagon is aggressively courting domestic automakers, seeking to leverage their mass-production assembly lines and secure domestic supply chains amid ongoing conflicts in the Middle East and Ukraine.The Army is shopping for roughly 600 new heavy-duty tactical trucks, with a potential contract value exceeding $1 billion.

Ford's entry marks a high-profile return to a sector it once dominated. The company played an instrumental role in mass-producing the original military "Jeep" and building heavy bombers at its Willow Run plant during World War II.However, Ford completely exited the defense space in 1990 when it sold its Ford Aerospace division.

### GM's Head Start

While Ford is making a comeback, GM already has a commanding lead. The company established its dedicated GM Defense subsidiary in 2017 after a 14-year hiatus, and has been quietly building a formidable military footprint.

GM Defense is currently fulfilling an active multi-year contract supplying the U.S. Army with its Chevrolet Colorado-based Infantry Squad Vehicle (ISV), with over 1,000 units already delivered.The ISV is a lightweight, open-air tactical truck designed to rapidly move up to nine soldiers and their equipment across rugged terrain.

For the new heavy-duty contract, GM is already well ahead of the curve, having spent two years developing a heavy variant called the "ISV-Heavy," built on the Chevrolet Silverado HD platform.The Pentagon has already purchased early iterations of GM's military truck and has been subjecting it to rigorous field trials.

### The ISV-Heavy Competition

On June 30, 2026, the Army awarded prototype contracts to three companies: GM Defense, Ford Motor Co., and Utah-based off-road specialist BC Customs.Each company will deliver three prototypes by March 30, 2027, for operational assessments and developmental testing.

The military's requirements are steep. The vehicle must be highly capable of transporting infantry squads across extreme terrain while functioning as a mobile power generation station.The on-board electrical architecture must be robust enough to charge surveillance drones, run tactical command-and-control communications, and operate high-draw military gear.

Ford's strategy leans heavily on its F-Series Super Duty truck platform, adapting an existing commercial vehicle to accelerate development and keep costs down.GM is modifying the Chevrolet Silverado 3500 HD, incorporating a 102-kilowatt-hour battery and hybrid silent-drive capability.

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## The Energy Storage Race: Repurposing Batteries for the Grid

Simultaneously, both automakers are racing to capture a slice of the rapidly growing energy storage system (ESS) market.

The global ESS market is estimated to grow from $668.7 billion in 2024 to $5.12 trillion by 2034, driven by rising consumer energy costs, data center power demands, and grid modernization.

### Ford Energy Takes an Early Lead

Ford made the first major move, formally launching its Ford Energy subsidiary in May 2026.The company announced a $2 billion investment to repurpose its EV battery factory in Kentucky into a production facility for grid-scale energy storage systems.

Ford has already signed a five-year framework agreement with renewable energy services provider EDF Power Solutions North America, with its initial 20 gigawatts of capacity sold out.The unit is targeting 20 GWh of production by 2027.

The market response was immediate. Ford shares surged 45% in the days following the Ford Energy announcement, adding $23 billion in market value.

### GM Follows Suit

Not to be outdone, GM announced its own stationary energy storage initiative just weeks later.The automaker is pursuing a differentiated strategy, partnering with startup Peak Energy to develop next-generation sodium-ion batteries purpose-built for stationary power applications.

"Sodium is one of the most abundant elements on Earth, and that abundance creates a path toward battery systems built from more accessible materials with greater long-term resilience," said Kurt Kelty, GM's vice president of battery and sustainability.

Sodium-ion cells can perform across a wider range of temperatures and for more charge cycles than lithium iron phosphate (LFP) batteries, potentially eliminating the need for active cooling systems.

GM is also taking a multi-pronged approach, using its Ultium Cells joint venture to produce LFP storage cells and working with Redwood Materials to deploy thousands of second-life EV battery packs into microgrids.A 7.2 MWh system at a Michigan plant is expected to generate an estimated $3 million in electricity savings over its lifetime.

### The Vehicle-to-Grid Opportunity

GM is also pitching itself as a "distributed utility," leveraging its existing EV fleet. More than 250,000 GM EVs on U.S. roads can already charge bidirectionally—pulling electricity from the grid and sending it back.

"Every evening, a quiet transformation occurs across the American landscape," writes GM Energy vice president Wade Sheffer, describing EVs sitting in driveways as "a massive opportunity to aggregate energy storage capacity."

The bet puts GM on a collision course with Ford's newly branded Ford Energy unit as both Detroit rivals race to repurpose underused EV capacity for a more urgent problem: keeping the lights on in the AI era.

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## The Financial Reality: Small Today, But Growing Fast

### GM Defense's $700 Million Target

GM expects its 2026 defense revenue to grow to nearly $700 million, and is targeting positive earnings before interest and tax in the business this year.That's a small fraction of GM's $186 billion total annual revenue, but it's a start.

The potential upside is significant. Defense stocks in the S&P 500 trade at 30 times forward earnings, while energy-storage-related stocks trade at even higher multiples.Ford and GM trade at 7.8 times and 6.2 times forward earnings, respectively.

### Diversification Adds $23 Billion in Market Value

Ford's launch of Ford Energy added $23 billion in market value.GM climbed 16% on its earnings call.Both companies raised full-year guidance for the second time this year.

Analysts estimate that even under optimistic scenarios, these ventures would contribute less than 1.5% of GM's operating profit by 2030, and about 5% of Ford's by 2029.But the growth rates are impressive: Morgan Stanley projects U.S. energy-storage demand to grow at a compound annual rate of 38% through 2030.

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## The Historical Precedent: Learning from the 1980s

This isn't the first time Detroit's automakers have looked beyond their core business for growth. In the mid-1980s, flush with profits from a booming economy and import restrictions on Japanese cars, both companies embarked on diversification sprees.

Ford bought financial-services companies including First Nationwide and Associates. GM acquired defense manufacturer Hughes Electronics and plowed more than $40 billion into automation.

Those attempts largely failed. Ford fell behind Japan's engine technology because it spent too much on diversifying instead of focusing on its core business.GM's plant productivity actually declined over its heavy investment period in the 1980s.

The bullish argument this time is that Ford and GM aren't spending buckets of money or stepping far outside their comfort zone.GM's military vehicles are based on off-road trucks using commercial off-the-shelf parts. Ford Energy repurposes existing battery manufacturing capacity.

But history suggests investors should temper their enthusiasm.

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## What This Means for the Future

The GM-Ford rivalry is entering a new chapter. The battle for supremacy in vehicle sales will continue, but now it's being joined by competition for defense contracts and energy storage market share.

- **In defense**: GM has a decisive head start with its established Defense subsidiary and proven track record, but Ford's return to the sector after 36 years signals serious intent.

- **In energy**: Ford has an early lead with Ford Energy and a 20 GWh commitment, but GM is pursuing a differentiated sodium-ion strategy that could prove to be a long-term advantage.

- **The stakes**: While these new verticals represent small portions of the companies' revenue today, they could grow into significant diversifiers as auto sales slow.

"The industry is in decline," said Tom Narayan, equity analyst at RBC, noting that auto suppliers are also diversifying.The question is whether GM and Ford can succeed where they failed in the 1980s, or whether history is about to repeat itself.

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## Frequently Asked Questions (FAQs)

### 1. What is the ISV-Heavy competition?

The ISV-Heavy (Infantry Squad Vehicle-Heavy) is a U.S. Army program to develop a new tactical vehicle that can transport infantry squads while providing mobile power generation. The Army has awarded prototype contracts to GM Defense, Ford Motor Co., and BC Customs.

### 2. How much is the Army truck contract worth?

The total contract could exceed $1 billion if the Army proceeds with full production. The Army plans to buy 606 vehicles, with a gross weapon system unit cost of $617,000.

### 3. What is Ford Energy?

Ford Energy is a subsidiary launched by Ford in May 2026 to sell grid-scale battery storage systems. It repurposes EV battery factories to produce energy storage equipment and has already signed a five-year framework agreement with EDF Power Solutions.

### 4. What is GM's energy storage strategy?

GM is pursuing multiple approaches: developing sodium-ion batteries with startup Peak Energy, producing LFP storage cells through its Ultium Cells joint venture, and deploying second-life EV battery packs into microgrids with Redwood Materials.

### 5. How much revenue does GM expect from defense in 2026?

GM expects its 2026 defense revenue to grow to nearly $700 million, and is targeting positive earnings before interest and tax in the business this year.

### 6. Why are GM and Ford pivoting to defense and energy?

The automakers have lost billions on electric vehicle initiatives and are looking to fill capacity that they previously thought they'd use for batteries. Both markets offer growth opportunities as new vehicle sales slow.

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## The Bottom Line

General Motors and Ford are taking their century-old rivalry into new territory. The battle for automotive supremacy will continue, but now it's being joined by competition for Pentagon dollars and a stake in the energy storage revolution.

The diversification makes strategic sense. Both automakers have the manufacturing expertise, battery technology, and scale to compete in these adjacent markets. The potential upside is real, with defense stocks trading at premium multiples and energy storage demand projected to grow at nearly 40% annually.

But history offers a cautionary tale. The 1980s diversification sprees by both companies largely failed, distracting them from their core business. The question is whether this time is different—whether GM and Ford can successfully build these new verticals without losing focus on the vehicles that made them American icons.

For now, the smart money is watching. Ford shares surged 45% on the Ford Energy announcement, while GM climbed 16%. But as one analyst noted, even under optimistic scenarios, these ventures would contribute less than 1.5% of GM's operating profit by 2030.

The battle is joined. The outcome is far from certain. But one thing is clear: the GM-Ford rivalry is far from over—it's just finding new battlefields.

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## Disclaimer

*This article is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. All views expressed are based on publicly available information as of September 2026. Market conditions, contract awards, and company strategies are subject to change. The author does not endorse any specific investment strategies or products. Past performance is not indicative of future results. Before making any financial or investment decisions based on the content of this article, please consult with qualified professionals who can evaluate your specific situation.*