GM is joining the race to build batteries for AI data centers and the grid

The race to secure the power of AI data centers has spilled over into some unusual areas, including the automotive world.

Battery recycler Redwood Materials started the trend last year with a new energy storage division and a project that attached old EV packs to its Crusoe data center in Nevada. Then Ford said it was retooling its battery manufacturing capabilities to make grid-scale batteries. And now GM is announcing its own — no doubt very ambitious — energy storage system (ESS) plans.

On Tuesday, GM introduced two new phases in its assault on the electric storage market. The biggest change so far is GM’s new partnership with energy storage startup Peak Energy. Through that partnership, GM is developing a new sodium-ion battery chemistry designed for grid-scale deployment.

Outside of China, no automaker has announced plans to build sodium-ion cells.

“The way we’re getting into the market is a simple way, with ESS,” Kurt Kelty, GM’s vice president of battery and sustainability, told TechCrunch. “The performance features are exactly what’s needed in that market.”

GM would not share with TechCrunch how much it is investing in the energy-saving effort. But we do know that the company has committed $900 million to commercialize new battery chemicals, an investment that includes a new battery development facility.

Sodium-ion batteries work in the same way as lithium-ion, but they swap important materials to make the cells cheaper, last longer, and don’t heat up as much. The trade-off is that sodium-ion batteries need to be larger and heavier to store the same amount of electricity.

Peak Energy is already working on energy storage systems that use sodium-ion batteries. Because sodium-ion batteries behave differently than lithium-ion, Peak has developed a power storage system with that in mind. Its grid-scale batteries have no cooling systems or fire suppression systems because there is little risk of overheating. The setup reduces upfront costs, and should also eliminate costly maintenance, Paul Menson, GM’s director of energy conservation marketing, told TechCrunch.

“This is a manifestation of the most difficult part of engineering is not a part at all,” he said. “Remove the part, remove the problem.”

GM plans to sell sodium-ion cells initially, then integrate them into its products. But that won’t happen soon.

The first GM cells are expected to enter trial production at the company’s battery cell development facility in 2028. TechCrunch was recently given an exclusive look at the new facility, which GM expects will cut nearly a year off the process of selling sodium-ion batteries, cutting costs in the process.

GM sodium-ion cells are still years away from commercial production, however. In the meantime, the automaker will sell lithium iron phosphate (LFP) cells to LG Energy Solution for use in its energy storage systems. LG Energy Solution already works with GM through its Ultium joint venture, which makes batteries for the automaker’s EVs.

Alongside the partnership with LG and Peak, GM announced that it is expanding its work with Redwood Materials, a battery recycling and energy storage innovation founded by former Tesla CEO JB Straubel.

Redwood already buys scrap from GM’s battery factories and used the battery packs in its EVs. GM has a pipeline of about 10,000 packs that it ships to Redwood, and the startup is running a 12 megawatt/63 megawatt-hour microgrid using second-life packs at the Crusoe data center in Sparks, Nevada. GM said it is buying the 7.2-megawatt Redwood system for use at one of its plants in Michigan, estimating it will save it about $3 million over its lifetime.

The GM filing is Redwood’s “first step,” Cal Lankton, Redwood’s chief commercial officer, told TechCrunch.

Data centers, where Redwood already operates, and industrial sites like GM are “very different things,” he said. Where data centers may use batteries almost continuously to absorb some of the power fluctuations from GPUs, industrial sites are more likely to use them to shave power demand spikes, which can lower monthly energy bills, and use them to provide backup power in the event of an outage.

“The firm is very happy because now we have a reliable industry,” said Kelty. “Eventually, we’re going to install the same equipment like this in all our factories. It makes good economic sense.”