Morgan Stanley turns bullish on Ford's EV storage business

Ford Motor banal surged 13% successful a azygous league the week of May 10 aft Morgan Stanley issued a bullish call connected the automaker's energy retention business. That was Ford’s biggest one-day summation since March 2020.

For context, that benignant of determination doesn't hap without a superior catalyst.

And this 1 came from an unexpected country of Ford's (F) business. Not trucks oregon electrical vehicles, but from vigor storage.

Morgan Stanley is betting large connected Ford Energy

Morgan Stanley expert Andrew Percoco published a enactment arguing that Ford Energy is simply a hidden gem that the marketplace has mostly ignored.

His cardinal argument: Ford's licensing agreement with Contemporary Amperex Technology, amended known arsenic CATL, gives the automaker a uncommon edge.

It puts Ford successful a tiny radical of suppliers that tin offer artillery vigor retention systems (BESS) that suffice arsenic compliant nether Foreign Entity of Concern (FEOC) rules.

Related: The Chinese artillery elephantine powering Tesla conscionable raised $5 billion

Those rules substance due to the fact that customers request compliant systems to suffice for the 30% Investment Tax Credit for vigor retention projects.

Percoco enactment a imaginable valuation of $10 cardinal connected Ford Energy. He besides noted that if the institution builds retired its capableness and secures a coagulated bid backlog, that fig could yet attack what Tesla's vigor concern commands successful the market.

The expert added that helium expects Ford to denote proviso agreements with ample commercialized customers, and perchance hyperscalers, wrong the adjacent fewer months.

Ford Energy's Kentucky mill is nether focus

Ford Energy is simply a wholly owned subsidiary of Ford Motor, formally introduced earlier successful May. The institution spent the amended portion of a twelvemonth softly laying groundwork earlier going nationalist with it.

The program is to repurpose an existing artillery factory successful Glendale, Ky., that was antecedently portion of a associated task with South Korean artillery shaper SK On, called BlueOval SK.

When that concern ended, Ford took ownership of 2 Kentucky facilities. One of them, successful Glendale, is present being converted into a accumulation tract for artillery cells and ample retention containers.

Ford is allocating $2 cardinal for the buildout. Its flagship merchandise is the Ford Energy DC block, a standardized 20-foot containerized retention portion built astir 512 amp-hour lithium robust phosphate (LFP) prismatic cells.

It comes successful 2 versions: a two-hour strategy and a four-hour system. Both diagnostic liquid-cooled thermal absorption and are designed for 20 years of performance.

Ford is targeting astatine slightest 20 gigawatt hours of yearly accumulation capacity, with archetypal deliveries planned for precocious 2027.