In the auto industry, there are few things deadlier for profits than idle factories. That is what confronted Ford Motor after it shut down eight million square feet of new but barely used manufacturing space in December in rural Kentucky.
The factory in Glendale, an hour’s drive south of Louisville, briefly produced batteries for electric vehicles, which have not sold as well as Ford expected. Now Ford plans to make large batteries, some as big as shipping containers, that utilities, data centers and other companies use to manage fluctuations in energy supply and insure against blackouts.
Converting the factory might help Ford avoid the costs of maintaining an unused plant and tap into the fast-growing demand for storage batteries.
“I’m confident that they can compete,” Kentucky Gov. Andy Beshear, a Democrat, said in an interview. “The demand is enormous.”
Ford, which plans to restart production next year, said in a statement that it would deploy “more than a century of manufacturing expertise and licensed advanced battery technology.”
But it’s a risky move for a company that primarily makes cars. Ford has little experience manufacturing batteries, and it faces numerous seasoned competitors, including Tesla, LG Energy Solution and SK On, the South Korean company that built the factory with Ford.
Ford and SK On dissolved their joint venture in December, four months after it began producing vehicle batteries, and Ford assumed sole ownership.
The vast factory buildings along Interstate 65, with walls as white as the snow that recently covered surrounding fields, are testimony to the auto industry’s challenges.
President Trump’s tariffs have upended supply chains. Republicans in Congress have scrapped Biden administration policies that helped consumers pay for electric vehicles and provided funds for companies to build battery factories like the one in Kentucky.
The Trump administration is trying to gut clean-air rules, freeing Ford and others to sell more big gas-powered pickups and sport utility vehicles, which tend to be the most profitable. That puts the U.S. market out of sync with the rest of the world, which is rapidly moving to electric vehicles.
The Glendale factory made batteries for the F-150 Lightning, an electric pickup that Ford stopped producing in October soon after the expiration of federal tax credits worth up to $7,500 for electric vehicle purchases.
The shift away from electric vehicles has been costly. In December, Ford announced that it would lower its earnings by $19.5 billion to reflect the diminished value of its investments, including $6 billion related to the Kentucky plant and the joint venture with SK On.
Ford will now spend another $2 billion to install new machinery and make other changes to the factory.
General Motors and Stellantis have also taken multibillion-dollar losses, part of a broad retrenchment prompted in part by Trump policies that favor fossil fuels.
But the White House has been less hostile to battery storage than solar and wind energy. Large batteries can be used for any source of electricity, not just renewables. And federal financial incentives for battery storage manufacturing remain in place.
There is a role for batteries “to enhance our ability to deal with peak demand,” Chris Wright, the secretary of energy, said last week at a news conference to discuss the government’s winter storm response.
Some analysts and industry executives said Ford could succeed. Demand is strong from data centers, which require steady, uninterrupted power, and utilities that need batteries to meet peak electricity demand. Batteries can also be a critical source of energy during storms and other emergencies.
“We would take a close look at a powerhouse manufacturer like Ford entering this space,” said Lauren Glickman, vice president of policy and communications at Encore Renewable Energy, a Vermont company that builds solar energy and battery projects.
Many businesses, and even some homeowners, are using batteries: charging them when power is cheap and using the stored power when electricity is expensive.
Ford’s advantages — it’s big and has been around since the beginning of the 20th century — may give customers confidence that it will be able to service its products.
“I wouldn’t bet against them being capable of doing it,” said Ardes Johnson, a former Tesla executive who is the chief executive of NeoVolta, a California company that provides batteries for homes and businesses.
Decades ago, Ford owned many businesses, including rubber plantations and iron and coal mines. More recently, it has stuck mainly to cars and trucks.
But some experts say automakers should be entrepreneurial because car sales are flat and profits thin.
“If you take a step back and look at the overall auto market, it’s not really growing,” said Lenny LaRocca, who leads the auto industry practice at the consulting firm KPMG. “So what else can you do to drive profit?”
Ford, in fact, may be late to the game. Tesla has made storage batteries for years and is expanding. Other companies are also investing in this business.
“There is a gap between U.S. battery storage demand and the amount that can be manufactured here,” said Allison Weis, global head of storage at Wood Mackenzie, a research firm that focuses on energy. But she said there could be a glut by the end of the decade.
Worker representatives are angry that Ford has not promised to rehire 1,600 people who lost their jobs when the factory shut down, though the company said it would consider their applications for 2,100 new positions. Ford is also challenging the results of an election in August when workers voted to join the United Auto Workers.
But union representatives give Ford credit for finding another use for the complex.
“The fact that they’re just trying to make sure that they keep the building filled, I applaud that,” said Laura Dickerson, vice president of the U.A.W. and director of the union’s Ford department. “What I would applaud more is if they kept it filled with union workers,” she added.
Ivan Penn contributed reporting from Washington.
Jack Ewing covers the auto industry for The Times, with an emphasis on electric vehicles.
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