Everyone wants a piece of Tesla’s batteries

First Tesla, then Ford, and now GM — it seems every automaker wants a piece of the energy storage market.

It’s easy to see why. While EV sales have stationary In the United States, sales of large, fixed batteries have doubled in the past two years. And they show no signs of stopping.

Despite the incentives eliminated in the One Big Beautiful Bill, the Solar Energy Industries Association is waiting Annual installations will exceed 110 GWh per year by 2030, roughly double what they are today.

“There’s a lot of potential for this market,” Kurt Kelty, GM’s vice president of batteries and sustainability, told TechCrunch.

GM has dabbled in energy storage before, but on Tuesday it made a bigger move, launching an entirely new sodium-ion battery chemistry aimed at the heart of the market.

The rapid rise of the energy storage market is driven by the convergence of three trends. The most obvious is the expansion of data centers built to serve artificial intelligence. Energy demand for data centers is expected to nearly triple by the end of the decade. But alongside this growth, entire areas of the economyincluding transportation, manufacturing and HVAC, are electrified.

“Data centers are a big part of the growth, but even without data centers, it’s really started to grow,” Kelty said.

Automakers aren’t the only ones diving into energy storage. Startups have raised large rounds to capture a piece of the market. 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, rotate somewhat. The electric RV maker now sells a mobile battery for construction sites and other locations that need temporary power.

So far, Tesla has taken the lion’s share of the energy storage market. Of the 57 gigawatt hours installed last year, Tesla was responsible for 82% of those installations. The company’s annual revenue from energy generation and storage has doubled from 2023, mainly due to the development of the Megapack and Powerwall facilities. Tesla’s gross profit for the segment is about 30%, about twice what it makes selling EVs and at least three times higher than typical automotive profit margins. GM’s gross profit margin over the past 15 years has been average just over 11%.

But despite the market’s potential, GM isn’t exactly in a rush. Instead, its first major product, sodium ion cells, won’t be ready until later this decade. “We’re going to develop a family of cells that are right for this market,” Kelty said.

Kelty and his team point to the advantages of sodium ion as reason enough to wait: The materials are cheap and plentiful, require no active cooling system, and can withstand many more charge-discharge cycles than lithium-ion batteries.

It doesn’t hurt that China has yet to destroy the market for sodium-ion battery materials as it has with other chemicals. Almost all of the world’s cobalt is processed by Chinese companies, for example.

“It gives us a path to supply chain resilience and low-cost materials,” Andy Oury, director of business planning at GM, told TechCrunch. “Sodium ion is very much in its infancy with the opportunity for the supply chain to grow wherever people want to invest in it.”

GM could have taken a path of least resistance by simply repackaging the lithium-ion cells it currently pumps out at its gigafactory plants, as Tesla and Ford have done. But the automaker remains bullish on the future of electric vehicles and is reluctant to reallocate its lithium-ion capacity, fearing it will be caught flat-footed if there is a resurgence in the electric vehicle market.

“It’s one thing to build cells when there’s excess capacity,” Oury said. “It’s another thing when we go back into high-growth mode and every new battery you want needs a new unit.”

Such a resurgence could be partly within GM’s control. The company is developing an entirely new chemistry, lithium-manganese-rich (LMR), which is set to debut in 2028. LMR promises to offer most of today’s range while reducing the cost of a new EV by around 10%. This would bring EVs close to parity with fossil fuel vehicles, removing one of the main barriers to adoption.

After LMR, sodium ion is another chemistry that could disrupt the automotive industry. Chinese automakers have already begun to deal with this. Electric electric vehicles powered by sodium ion packs are heavier and have a shorter range, but are cheaper and less prone to catching fire. Plus, they have it fast charging capability. Overall, this makes for an attractive combination for lower-cost electric vehicles.

“Is this the right play for EVs in the long term? That has yet to be decided,” Kelty said. “It gives us the advantage that if we want to go in that direction, it will be very easy for us because we’ll be right to do a lot of research on it anyway. We’re not ruling it out.”

The risk in moving more deliberately than its competitors, of course, is that the AI ​​bubble bursts, data center construction grinds to a halt, and GM misses the mark. Paul Menson, director of energy storage commercialization at GM, believes the bet on sodium ions will pay off even if that happens. “No market grows indefinitely 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 shrinking market, because you still have the best product.”

Even still, Kelty has a sense of urgency. “We’re actually exploring other ways to get to market faster,” he said. “We’ll certainly try to go as quickly as possible.”