General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F), rivals for more than a century in racing and vehicle sales, are now competing in defense contracting and energy storage, CNBC reported on September 5.
Ford joined GM this year in seeking U.S. military contracts after the Trump administration approached domestic automakers about using their mass manufacturing expertise. GM is years ahead in this space, already building a backlog around a U.S. Army contract for Infantry Squad Vehicles that could exceed $1 billion depending on congressional appropriations. GM expects its 2026 defense revenue to grow to almost $700 million while targeting positive earnings in the segment this year. Both companies are also entering the energy storage system market, betting on rising electricity costs and data center power demand. The global Energy Storage System market is projected to grow from $668.7 billion in 2024 to $5.12 trillion by 2034. Ford Energy sits within its Model e electric vehicle segment, which is guided to a $4 billion loss in 2026 before targeting breakeven by 2029.
CEO Jim Farley told investors in July that Ford is in the “third inning” of selling out 20 gigawatt-hours of energy storage production capacity, backed by a five-year framework agreement with EDF Power Solutions North America.
Bull Case
General Motors Company (NYSE:GM) and Ford can turn underused EV-related manufacturing capacity into new revenue streams as EV demand falls short of earlier expectations. GM already generates defense revenue and expects roughly $700 million from the segment in 2026. Ford has also committed $2 billion to launch its energy-storage business. These initiatives give both automakers new ways to make returns from investments that originally targeted faster EV use.
GM’s defense business already has commercial traction since the Army’s Infantry Squad Vehicle program could make more than $1 billion in potential revenue. GM expects the defense segment to deliver positive earnings in 2026. Hence, the business gives GM a credible growth avenue beyond traditional vehicle sales rather than an absolute speculative diversification effort.
Ford Motor Company (NYSE:F) also has early evidence of demand for its energy-storage business. Ford signed a five-year framework agreement with EDF Power Solutions that gives EDF access to up to 4 GWh of Ford’s battery-storage capacity annually, or 20 GWh over the full agreement. Ford expects deliveries to begin in 2028. It gives the company a significant commercial opportunity as the global ESS market expands toward a projected $5.12 trillion by 2034.
Bear Case
General Motors Company (NYSE:GM) and Ford still need to prove that these new businesses can materially affect their enormous automotive operations. The firm expects roughly $700 million in defense revenue in 2026, a small amount relative to its broader automotive business. Both companies are managing substantial EV-related losses and restructuring costs. These new ventures cannot offset the financial pressure from the auto business quickly.
Ford Motor Company (NYSE:F) also faces a long path before its energy-storage business can contribute to earnings. Ford expects deliveries under its EDF agreement to begin in 2028. Ford’s Model e business still targets a $4 billion to $4.5 billion loss in 2026 and does not expect the unit to reach breakeven until 2029. So Ford must fund its new growth strategy while its EV business consumes substantial resources.
The new businesses also face major execution and competitive risks. GM depends partly on future government procurement and congressional appropriations for potential defense growth. Ford enters energy storage against established battery and energy-storage specialists. The projected $5.12 trillion ESS market creates a large opportunity, but its size does not guarantee that either automaker will capture any meaningful market share.
Hedge Fund Data
Insider Monkey’s database shows General Motors Company (NYSE:GM) was held by 75 hedge funds in the second quarter of 2026, down from 77 in the first quarter, with holdings value falling to $4.87 billion from $6.08 billion. Ford Motor Company (NYSE:F) held steady at 50 funds across both quarters, with holdings value slipping to $1.02 billion from $1.12 billion. GM remains the far more heavily held of the two automakers by dollar value, even as both saw holdings value soften this quarter.
Conclusion
GM and Ford are looking beyond a difficult EV transition toward defense and energy as new growth avenues, with GM further along in defense and Ford building an early commercial pipeline in energy storage. Investors should watch whether GM and Ford can turn these new ventures into profitable businesses that offset pressure from their EV operations.
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