Tesla’s battery business is in high demand
▼ Summary
– The energy storage market is growing rapidly, with annual installations expected to exceed 110 GWh by 2030, driven by data center expansion and broader electrification.
– GM announced a new sodium-ion battery chemistry for energy storage, aiming for supply-chain resilience with cheap, abundant materials, though it won’t be ready until later this decade.
– Tesla dominates the market, accounting for 82% of 57 GWh installed last year, with energy storage gross profits around 30%, far exceeding typical automaker margins.
– GM is developing sodium-ion and lithium-manganese-rich (LMR) batteries for future EVs, with LMR set to debut in 2028 and potentially cut EV costs by 10%.
– GM is cautious about repurposing lithium-ion capacity for storage, fearing it could hinder EV production if demand resurges, but is exploring faster market entry methods.
The energy storage boom is no longer just Tesla’s game. After Ford and GM jumped in, the sector has become a magnet for every major automaker , and for good reason.
While EV sales have hit a plateau in the United States, the market for large-scale stationary batteries has surged, doubling in size over the past two years. And the momentum shows no signs of fading. Even after the One Big Beautiful Bill Act stripped away many incentives, the Solar Energy Industries Association still projects annual installations will hit over 110 GWh by 2030, roughly double today’s volume.
“There’s a lot of potential for this market,” said Kurt Kelty, GM’s vice president of battery and sustainability, in an interview with TechCrunch.
GM has experimented with energy storage before, but this week it made a bolder move by unveiling an entirely new sodium-ion battery chemistry, strategically aimed at the core of this expanding market.
Three converging trends are fueling the rapid rise of energy storage. The most visible is the explosion of data centers built to power AI, with energy demand expected to nearly triple by decade’s end. At the same time, large segments of the economy , transportation, manufacturing, and HVAC , are undergoing electrification.
“Data centers are a big part of the growth, but even without data centers, it started to really pick up,” Kelty noted.
Automakers aren’t alone in chasing this opportunity. Startups are raising massive rounds to claim their share. Base Power secured a $1 billion Series C in October to expand beyond Texas, while Lunar Energy raised $232 million for residential battery sales. Even Lightship, the electric RV maker, is pivoting to sell mobile batteries for job sites and temporary power needs.
For now, Tesla dominates the market. Last year, it accounted for 82% of all 57 gigawatt-hours installed globally. Its energy generation and storage revenue has doubled since 2023, driven largely by Megapack and Powerwall sales. Tesla’s gross profits in this segment hover around 30% , roughly double its EV margins and at least three times the typical automaker margin. By contrast, GM’s average gross margin over the past 15 years has been just over 11%.
Yet GM isn’t rushing headlong into the market. Its first major product , the sodium-ion cells , won’t be ready until later this decade. “We’re going to develop a family of cells that is appropriate for this market,” Kelty said.
The company’s patience is rooted in sodium-ion’s advantages: cheap, abundant materials, no need for active cooling, and a longer cycle life than lithium-ion batteries. There’s also a strategic edge , China hasn’t cornered the supply chain for sodium-ion materials the way it has for cobalt, nearly all of which is processed by Chinese firms.
“It gives us a path towards supply-chain resilience and low-cost materials,” said Andy Oury, GM’s business planning manager. “Sodium-ion is very much in its infancy with the opportunity for the supply chain to grow anywhere people want to invest in it.”
GM could have taken the easier route, repackaging lithium-ion cells from its gigafactories as Tesla and Ford have done. But the automaker remains bullish on EVs and doesn’t want to divert its lithium-ion capacity, fearing it might be caught off guard by a market resurgence.
“It’s one thing to build cells when there’s excess capacity,” Oury said. “It’s another thing when we return to a high-growth mode and every new battery you want needs a new plant.”
Part of that resurgence could be within GM’s control. The company is developing a lithium-manganese-rich (LMR) chemistry set to debut in 2028, which promises to deliver most of today’s range while cutting EV costs by about 10%. That could bring EVs close to price parity with fossil fuel vehicles, removing a key barrier to adoption.
After LMR, sodium-ion could disrupt the automotive industry. Chinese automakers have already started experimenting with it. EVs powered by sodium-ion packs are heavier and have shorter range, but they’re cheaper and less prone to fire. They also charge rapidly, making them an attractive option for lower-cost EVs.
“Is this the right play for EVs in the long run? That’s yet to be decided,” Kelty said. “It does give us the advantage that if we want to go that direction, it’ll be very easy for us because we’re going to be right doing a lot of research on this anyway. We’re not ruling it out.”
The risk of moving slower than competitors is real: the AI bubble could burst, data center construction could stall, and GM might miss the wave. Paul Menson, GM’s director of energy storage commercialization, believes the bet on sodium-ion will hold up regardless. “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 really matter what happens in the market contraction because you still have the best product.”
Still, Kelty is pushing for speed. “We’re actually exploring other ways to get in the market faster,” he said. “We’re definitely going to try and go as fast as possible.”
(Source: TechCrunch)
