General Motors (GM) announced that it will make a major entry into the energy storage market, which is deeply tied to the rapidly growing power demand in data centers and power grids. In the race for stable power supply for AI data centers, the traditional auto giant is trying to become a key energy provider behind the infrastructure through new battery technology.
In the past year, automobile and battery companies have frequently entered the energy storage business across borders. Battery recycling company Redwood Materials took the lead and established an energy storage division, and cooperated with Crusoe in Nevada, USA, to use scrapped electric vehicle battery packs to power data centers. Subsequently, Ford announced that it would shift some of its battery manufacturing capacity to grid-level energy storage battery production. Today, the energy storage plan announced by GM is more ambitious in terms of scale and technical route, targeting a wide range of scenarios from AI data centers to factory power use.
According to GM’s latest plan, the company’s layout in the energy storage field mainly includes two phased actions. The most important step is to reach a strategic cooperation with the start-up company Peak Energy to jointly develop a new sodium-ion battery system for grid-level applications. Except for the Chinese market, no other car company has announced a large-scale mass production plan for sodium-ion batteries, which makes GM's technology route selection quite rare among global car companies.
Kurt Kelty, GM's vice president of battery and sustainability, said the company chose to enter the market from energy storage systems because the battery performance requirements of this scenario are highly matched with the sodium ion chemical system being developed by GM. GM did not disclose the specific amount of investment in this energy storage project, but it is known that it has previously committed to investing US$900 million in the commercialization of new battery chemistry systems, including a new battery development center and other related infrastructure.
Sodium-ion batteries are similar to lithium-ion batteries in terms of working principle, but have substitutions in key materials with the goal of reducing costs, extending life and reducing the risk of overheating. The trade-off: Sodium-ion batteries tend to be larger and heavier for the same energy storage capacity. For grid-level energy storage systems with relatively loose space and weight restrictions, this trade-off is considered acceptable, and has become one of the key factors why GM chose to prioritize sodium-ion technology for energy storage scenarios rather than passenger cars.
Peak Energy has previously used sodium-ion batteries to build energy storage systems and redesigned the system architecture based on the characteristics of this battery. Due to the lower risk of overheating of sodium-ion batteries, Peak Energy's grid-scale energy storage products no longer require traditional cooling systems and fire suppression devices, thus reducing upfront construction costs and hopefully reducing maintenance expenses in long-term operations. Paul Menson, director of commercialization of GM energy storage, said that by "directly eliminating the most difficult component," companies can simultaneously reduce failure points and operation and maintenance risks.
According to the plans of both parties, GM will supply sodium-ion batteries to Peak Energy, which will complete system integration and provide complete energy storage solutions to customers such as power grids and data centers. However, it will take time for sodium-ion batteries based on GM's new system to be put into mass production. GM expects that the first batch of sodium-ion batteries will enter the trial production stage at its battery cell development center in 2028. GM believes that this new facility can shorten the commercialization cycle of new battery chemistry systems by approximately one year, and further dilute R&D and verification costs in the process.
Before the sodium ion system is fully commercialized, GM will participate in the energy storage market through a more mature technology path. The current plan is to supply lithium iron phosphate (LFP) cells to LG New Energy for use in its energy storage system during the transition phase. LG New Energy and GM have previously cooperated in the production of electric vehicle batteries through the Ultium joint venture. This cooperation will bring the energy storage business into the existing cooperation framework.
In addition to its cooperation with Peak Energy and LG New Energy, GM also announced the expansion of its cooperation with Redwood Materials. Redwood was founded by former Tesla executive J.B. Straubel and its business covers battery recycling and energy storage systems. Currently, Redwood has obtained production waste from GM's battery factory and received a large number of scrapped battery packs from GM electric vehicles for recycling. GM said that currently about 10,000 battery packs are queued up to be sent to Redwood for processing.
In the data center scenario, Redwood has deployed a microgrid system composed of secondary batteries in a Crusoe data center in Sparks, Nevada, with a scale of 12 MW/63 MWh, to provide stable power support for the data center. This time, GM decided to introduce a Redwood energy storage system with a capacity of 7.2 MWh at a factory in Michigan. GM estimates that this system is expected to save the factory approximately $3 million in energy costs over its entire life cycle. Redwood Chief Commercial Officer Cal Lankton said that this project is a "first step" for Redwood and will help the company further expand its application territory from data centers to industrial sites.
From the perspective of application scenarios, there are obvious differences in the use of energy storage systems in data centers and large factories. In GPU-intensive data center environments, batteries are often used frequently to smooth power fluctuations caused by computing loads. In contrast, industrial scenarios such as GM factories pay more attention to peak shaving and valley filling - by discharging batteries during peak hours of electricity consumption, reducing the peak demand in grid billing, thus compressing monthly electricity bills, while providing backup power in the event of grid failure to improve production continuity and reliability.
Kelty said that for GM, this type of energy storage system is not only a cost-saving tool, but also an important part of improving overall operational resilience. He revealed that the Michigan factory project is regarded as a model project, and the company has shown high interest in improving the reliability of the factory through energy storage. According to GM's vision, in the future, its factories around the world will gradually deploy similar energy storage systems to achieve dual benefits between economic accounts and stable operations.