By Ryan Felton

Ford Motor's stock price has surged to its highest level in nearly three years, and the reason has little to do with cars or trucks.

Over the past two weeks, Ford stock has risen 28% after the company announced a new energy-storage subsidiary, Ford Energy.

That division, which launched with a $2 billion investment, seeks to turn batteries once destined for electric vehicles into stationary energy-storage systems for artificial-intelligence data centers, power utilities and large industrial customers. The move puts Ford in competition with other major battery-making companies such as Tesla and LG Energy Solution.

For Ford's most bullish investors, the division represents an opportunity to capitalize on the AI boom and soaring energy demands in the U.S., right as the auto industry slogs through an EV downturn and suddenly has far less use for batteries than it once expected.

"There's been increased attention on their ability to utilize some of the energy capabilities that they have," said Citi auto analyst Michael Ward.

On Tuesday, shares of the Dearborn, Mich., automaker closed at $15.32, the highest since 2023. That is out of step with its crosstown rivals. Since the start of the year, General Motors shares have dropped about 2%, after rising more than 50% in 2025. Shares of Jeep and Ram parent Stellantis have fallen about 28% this year.

In particular, investors are optimistic about Ford Energy's involvement with the Chinese battery giant Contemporary Amperex Technology, or CATL, the world's largest battery producer. The company's stock began to surge earlier this month after a Morgan Stanley analyst estimated Ford's energy arm could be worth $10 billion.

"It is a true repurposing of excess battery cell capacity," said James Picariello, head of U.S. autos research at BNP Paribas.

The move to diversify into new revenue sources comes as the automotive industry navigates rough waters in 2026.

New-car sales are flagging as sky-high prices continue to weigh on consumers whose budgets are already stretched thin. The war in Iran sent oil prices upward, a possible strain on Detroit, which relies heavily on sales of large, gas-powered trucks.

Meanwhile, Ford has dealt with unique challenges of its own.

Ford has to accelerate production of F-Series trucks to meet its goal of recouping lost pickup volume in 2025, which has been further complicated by rising aluminum prices, Picariello said. "We're talking record levels of production the rest of the year to get there," he said.

While it will take time for Ford to turn its energy arm into a revenue-generating enterprise -- its first deliveries to customers are planned for late next year -- the move represents a bright spot for an industry that made a major bet on EVs but was forced to retrench amid changing regulations and waning consumer demand.

The enthusiasm for the energy business is being driven in part by the automaker's battery partnership with CATL. Ford is licensing CATL's low-cost technology for factories in Michigan and Kentucky to make batteries.

The partnership is a "critical edge for Ford and direct market opportunities as CATL's access to the U.S. market gets more limited," Jefferies analysts said in a note Tuesday.

All told, Ford Energy plans to deploy at least 20 gigawatt hours annually of the company's battery energy-storage systems.

A large-scale agreement with energy company EDF calls for Ford Energy to supply 4 gigawatt hours annually, beginning in 2028.

Picariello said Ford has to quickly notch additional similarly sized deals to prove the energy business will meet projected demand.

"We would need, in theory, five more of those types of awards to all take place in the next 12 or so months for us to reliably, with supreme confidence, say this is how and why and when Ford gets to 20 gigawatt hours of demand," Picariello said.

Ford's recent stock surge is unusual for the auto industry. Only Tesla, which more recently has become focused on autonomous vehicles and robotics, has enjoyed similar rides with its stock over non-car ventures.

"It's hard to find another comparison on the [original equipment manufacturer] side of things with the exception of Tesla," Picariello said.

Write to Ryan Felton at ryan.felton@wsj.com

(END) Dow Jones Newswires

A large-scale agreement with energy company EDF allows Ford Energy to supply as much as 4 gigawatt hours annually, beginning in 2028. "Ford's Stock Is Surging -- and It's Got Nothing to Do With Its Car Business," at 5:30 a.m. ET, said the agreement calls for Ford Energy to supply 4 gigawatt hours annually.

(END) Dow Jones Newswires

May 27, 2026 17:39 ET (21:39 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.