Everyone wants a piece of Tesla’s battery business

First Tesla, then Ford, and now General Motors — it seems like every automaker wants a slice of the energy storage market.

It’s easy to see why. While electric vehicle sales have remained stagnant in the United States, sales of large, stationary batteries have more than doubled in the past two years. And they show no signs of stopping.

Despite the elimination of incentives in the Big Beautiful Bill, the Solar Energy Industries Association expects annual installations to exceed 110 GWh per year by 2030, about 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 took an even bigger step, introducing an all-new sodium-ion battery chemistry aimed at the heart of the market.

The high-volume energy storage market is being pushed higher by the convergence of three trends. The most obvious is the expansion of data centers being built to serve artificial intelligence. Energy demand in data centers is expected to nearly triple by the end of the decade. But alongside this growth, entire sectors of the economy are being electrified, including transportation, manufacturing, and heating, ventilation, and air conditioning.

“Data centers are a big part of the growth, but even without data centers, growth is really starting to pick up,” Quilty said.

It’s not just automakers that are 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 Lightship, more or less revolve around themselves. The electric recreational vehicle manufacturer is now selling a mobile battery pack for job sites and other locations that need temporary power.

So far, Tesla has captured 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 power generation and storage has more than doubled since 2023, largely due to growth in its Megapack and Powerwall installations. Tesla’s total profits for this segment are about 30%, about twice what it makes selling electric cars and at least three times higher than typical automakers’ margins. GM’s gross profit margin over the past 15 years has averaged just over 11%.

But despite the market’s potential, GM is not rushing into this market. Instead, its first major product, sodium ion cells, will not be ready until later this decade. “We will develop a family of cells suitable for this market,” Kelty said.

Quilty and his team point to the power of sodium ions as reason enough to wait: The material is cheap and plentiful, doesn’t require an active cooling system, and can withstand much more charging and discharging cycles than lithium-ion batteries.

It doesn’t hurt that China has not yet captured the market for materials needed for sodium-ion batteries, as it has with other chemicals. For example, almost all of the world’s cobalt is processed by Chinese companies.

“It gives us a path toward supply chain resilience and low-cost materials,” Andy Urey, GM’s director of business planning, told TechCrunch. “Sodium ion is still in its early stages with supply chain opportunity to grow wherever people want to invest.”

GM could have taken the path of least resistance by simply refilling the lithium-ion cells it currently pumps into its giant factories, as Tesla and Ford have done. But the automaker remains optimistic about the future of electric vehicles, and does not want to reallocate its lithium-ion manufacturing capacity for fear of falling into an embarrassing situation if there is a recovery in the electric vehicle market.

“Building cells when there is excess capacity is different,” Urey said. “It’s another thing when we get back into high growth mode and every new battery you want needs a new factory.”

It is possible that such emissions are partly under GM’s control. The company is developing a completely new chemistry, lithium-manganese-rich (LMR), set to debut in 2028. LMR promises to deliver most of the current range while cutting the cost of a new electric vehicle by around 10%. This would bring EVs close to par with fossil fuel vehicles, removing one of the major hurdles to their adoption.

After LMR, sodium ion is another chemistry that could disrupt the automotive industry. Chinese automakers have already started dealing with it. Electric vehicles powered by sodium ion beams are heavier and have less range, but they are cheaper and less likely to catch fire. In addition, they have the ability to charge quickly. Altogether, this makes for an attractive combination for low-cost electric vehicles.

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

Of course, the risk in moving more deliberately than its competitors is that the AI ​​bubble bursts, data center construction stalls, and GM misses the wave. Paul Minson, GM’s director of energy storage marketing, believes the bet on sodium ion will pay off even if it does. “No market grows infinitely and forever,” he said. “That’s why you have to have the best product. Because if you have the best product, it doesn’t really matter what happens in a market downturn because you still have the best product.”

Even so, Kelty has a sense of urgency. “We’re actually exploring other ways to get to market faster,” he said. “We will definitely try to move as quickly as we can.”