Ford Advances Energy Storage Strategy Amid Ongoing Core Challenges

What happened

Ford has appointed Lisa Drake as President of Ford Energy to lead the launch of its battery energy storage systems (BESS) business, effective immediately. This move follows the company's December 2025 announcement to form the BESS unit, part of a broader pivot from aggressive EV investments after deep losses and slower adoption. According to the DeepValue report, Ford is restructuring towards a more measured electrification path, emphasizing hybrids and commercial vehicles while its Model e segment continues to lose $5.0-5.5 billion annually. The report highlights that Ford's core profit engines—Ford Blue and Ford Pro—face margin erosion from pricing pressure, UAW costs, and tariffs, with 2025 adjusted EBIT guidance cut to $6.0-6.5 billion from $10.2 billion in 2024. Despite the energy storage initiative offering long-term optionality, it introduces execution risks in a crowded market and does not address near-term earnings compression or EV losses.

Implication

The launch of Ford Energy under Lisa Drake reinforces Ford's shift to repurpose battery capacity for stationary storage, aligning with its EV retreat and capital reallocation. However, this move does not mitigate immediate financial headwinds from declining Blue and Pro margins or the $5.0-5.5 billion annual losses in Model e, which are central to the investment thesis. Investors must assess whether storage can become a material revenue stream by 2027, as targeted, but current valuation at $14.20 already discounts a smooth transition, per the DeepValue report. The report recommends a potential sell with an attractive entry at $11, citing risks from earnings compression, high leverage, and crowded market sentiment. Therefore, while energy storage adds long-dated optionality, it should not distract from monitoring near-term EBIT guidance and Model e loss trends for signs of structural improvement.

Thesis delta

The appointment of Lisa Drake to lead Ford Energy confirms the company's commitment to its battery storage initiative, which was previously outlined in the DeepValue report as part of the EV pivot. This does not alter the fundamental investment thesis, as the storage business remains a long-term play with uncertain returns and execution risks. Investors should continue to focus on the core issues of Blue+Pro margin stability and Model e loss containment for any material shift in valuation or risk-reward.