Automakers are increasingly turning to the energy storage business as demand for large stationary batteries continues to grow, even as electric vehicle sales in the United States have slowed.
General Motors (GM) is the latest to deepen its ambitions, joining Tesla and Ford in pursuing a market that has seen installations double over the past two years.
According to the Solar Energy Industries Association (SEIA), annual installations are expected to exceed 110 gigawatt-hours (GWh) by 2030, roughly twice current levels.
“There’s a lot of potential for this market,” Kurt Kelty, GM’s vice president of battery and sustainability, told TechCrunch.
AI and electrification drive demand
The growth in energy storage is being fueled by several trends.
These include:
- Rising power demand from AI-focused data centres
- Electrification of transportation
- Increased use of electric systems in manufacturing
- Growing demand from heating, ventilation and air-conditioning systems
“Data centers are a big part of the growth, but even without data centers, it started to really pick up,” Kelty said.
Data centre energy demand is expected to nearly triple by the end of the decade.
Tesla dominates the market
Tesla remains the largest player in the sector.
Of the 57 GWh of energy storage installed last year, the company accounted for 82 per cent of deployments.
Revenue from Tesla’s energy generation and storage business has doubled since 2023, supported by growth in Megapack and Powerwall installations.
The segment generates gross margins of around 30 per cent, compared with margins that are significantly lower in the traditional auto business.
GM’s average gross margin over the past 15 years has been just above 11 per cent.
GM bets on sodium-ion batteries
GM announced a new sodium-ion battery chemistry aimed at the energy storage market.
The technology will not be commercially ready until later this decade.
Kelty said the company plans to develop a range of battery cells tailored for energy storage applications.
According to GM executives, sodium-ion batteries offer several advantages:
- Lower-cost and widely available materials
- No requirement for active cooling systems
- Longer charge-discharge life
- Potential supply-chain diversification
“It gives us a path towards supply-chain resilience and low-cost materials,” Andy Oury, GM’s business planning manager, told TechCrunch.
He said sodium-ion technology remains in its early stages, allowing supply chains to develop wherever investment emerges.
Avoiding competition with EV production
Unlike Tesla and Ford, which have adapted existing lithium-ion technology for energy storage, GM does not want to divert battery production away from future electric vehicles.
“It’s one thing to build cells when there’s excess capacity,” Oury said.
“It’s another thing when we return to a high-growth mode and every new battery you want needs a new plant.”
GM is also developing lithium-manganese-rich (LMR) batteries, which are scheduled to debut in 2028.
The company said the chemistry could lower EV costs by about 10 per cent while delivering similar driving range to current batteries.
Startups target the sector
Interest in energy storage extends beyond established automakers.
Recent fundraising activity includes:
- Base Power, which raised a $1 billion Series C round in October.
- Lunar Energy, which secured $232 million to expand home battery offerings.
Electric RV maker Lightship has also entered the market with a mobile battery system for temporary power applications.
Faster entry under consideration
While GM’s sodium-ion products are still several years away, Kelty said the company is exploring ways to enter the market sooner.
“We’re definitely going to try and go as fast as possible,” he said.
TL;DR:
Automakers are expanding into energy storage as demand for large batteries rises. GM has unveiled sodium-ion technology aimed at the sector, joining Tesla and Ford in pursuing a market expected to exceed 110 GWh annually by 2030.
AI summary:
- GM is expanding its focus on energy storage with sodium-ion batteries.
- Tesla currently accounts for 82% of installed storage capacity.
- SEIA expects annual installations to top 110 GWh by 2030.
- AI data centres and broader electrification are boosting demand.
- GM is exploring ways to enter the market more quickly.
