First Tesla, then Ford, and now GM – it seems every automaker is looking for a piece of the energy storage market.
It’s easy to see why. While EV sales have stagnated in the United States, sales of large, stationary batteries have doubled in the past two years. And they show no signs of stopping.
Despite the incentives found in the One Big Beautiful Bill Act, the Solar Energy Industries Association expects annual installation to exceed 110 GWh per year by 2030, nearly double what it is today.
“There’s a lot of opportunity for this market,” Kurt Kelty, GM’s vice president of battery and sustainability, told TechCrunch.
GM has dabbled in energy storage before, but on Tuesday it took a big turn, unveiling a new sodium-ion battery chemistry aimed at the heart of the market.
The rising energy storage market is driven upward by the convergence of three trends. The most obvious is the expansion of data centers built to facilitate AI. Demand for data center capacity is expected to nearly triple by the end of the decade. But alongside that growth, all of the economy’s power, including transportation, manufacturing, and HVAC, is being electrified.
“Data centers are a big part of the growth, but even without the data centers, they really started to take off,” Kelty said.
Automakers aren’t the only ones dipping into the energy storage space. Startups have been raising large rounds to capture market share. Base Power raised a $1 billion Series C in October to expand beyond Texas, while Lunar Energy raised $232 million to sell batteries to homeowners. Others, like the Lightship, wander in some way. An electric RV manufacturer now sells a mobile battery for work sites and other places that need temporary power.
Until now, Tesla has taken a large share of the energy storage market. Of the 57 gigawatt hours installed last year, Tesla was responsible for 82% of that installation. The company’s annual revenue from energy production and storage has doubled since 2023, mainly due to the growth of Megapack and Powerwall installations. Tesla’s gross margin for the segment is around 30%, roughly double what it makes selling EVs and at least three times higher than the automaker’s typical margins. GM’s gross margin over the past 15 years has averaged just over 11%.
But despite market power, GM is slow to enter. Instead, its first major product, sodium-ion cells, won’t be ready until later this decade. “We’re going to build a family of cells that are right for this market,” Kelty said.
Kelty and his team point to sodium-ion energy as reason enough to wait: The materials are cheap and plentiful, don’t require an active cooling system, and can withstand more charge-discharge cycles than lithium-ion batteries.
It doesn’t hurt that China hasn’t cornered the market for sodium-ion battery materials, as it has for other chemicals. Almost all of the world’s cobalt is processed by Chinese companies, for example.
“It gives us a path to strengthening procurement and low-cost materials,” Andy Oury, GM’s business planning manager, told TechCrunch. “Sodium-ion is very small as it has the opportunity for the supply chain to grow wherever people want to invest.”
GM could take the path of least resistance by simply reassembling the lithium-ion cells it currently produces in its gigafactories, as Tesla and Ford have done. But the automaker is still working on the future of EVs, and doesn’t want to outsource its lithium-ion production capacity for fear of being caught flat-footed if there is a resurgence in the EV market.
“It’s one thing to build cells when the volume is too high,” Oury said. “It’s another thing when we go back into high growth mode and every new battery you want requires a new plant.”
Such resurgence may be subject to GM control. The company is developing a completely new chemistry, lithium-manganese-rich (LMR), which is due to start operating in 2028. LMR promises to deliver most of today’s range while reducing the cost of a new EV by around 10%. That would bring EVs closer to parity with gasoline vehicles, removing one of the biggest barriers to adoption.
After LMR, sodium-ion is another chemical that can affect the automotive industry. Chinese car manufacturers have already started to get hold of it. EVs powered by sodium-ion batteries are heavy and have a small diameter, but are cheap and prone to catching fire. In addition, they have the ability to charge quickly. All in all, that makes for an attractive combination of low-cost EVs.
“Is this the right play for EVs in the long run? That remains to be determined,” Kelty said. “It gives us an opportunity that if we want to go that way, it will be very easy for us because we will be ready to do a lot of research on this. We are not wasting it.”
The danger in deliberately moving ahead of competitors, of course, is that the AI bubble bursts, data center construction stalls, and GM misses the wave. Paul Menson, GM’s commercial director of energy storage, thinks the bet on sodium-ion will pay off even if that happens. “No market grows forever,” he said. “That’s why you have to have the best product. Because if you have the best product, it doesn’t matter what happens in the market downturn because you still have the best product.”
Still, Kelty has a sense of urgency. “We are actually looking at other ways to get into the market faster,” he said. “We will definitely try to go as fast as possible.”
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