The competition for power in AI data centers has extended to some unexpected sectors, notably the automotive industry. 

Last year, battery recycling company Redwood Materials initiated the trend by launching a new energy-storage division and a project that connected used EV batteries to a Crusoe data center in Nevada. Subsequently, Ford announced it was reallocating some of its battery-manufacturing capabilities to produce grid-scale batteries. Now, GM is revealing its own — potentially more ambitious — energy-storage system (ESS) plans. 

On Tuesday, GM introduced two new phases in its strategy for the energy-storage sector. The most significant move is GM’s partnership with energy-storage startup Peak Energy. For this collaboration, GM is creating a completely new sodium-ion battery chemistry designed for grid-scale usage.

Outside of China, no other automaker has declared intentions to manufacture sodium-ion cells. 

“Our entry into the market is through ESS, which is the straightforward approach,” Kurt Kelty, GM’s vice president of battery and sustainability, informed TechCrunch. “The performance attributes are exactly what is required in that sector.”

GM did not disclose the financial investment in this energy-storage initiative to TechCrunch. However, it has been reported that the company has allocated $900 million towards the commercialization of new battery chemistries, which encompasses a new battery-development facility.

Sodium-ion batteries function similarly to lithium-ion ones, but they substitute certain materials to create cells that are more affordable, longer-lasting, and less likely to overheat. The trade-off is that sodium-ion batteries tend to be bulkier and heavier to hold the same energy capacity. 

Peak Energy has already been developing energy-storage solutions utilizing sodium-ion batteries. Since sodium-ion batteries behave differently than lithium-ion types, Peak has designed an energy-storage system that accounts for these disparities. Its grid-scale batteries do not require cooling or fire-suppression systems due to a reduced risk of overheating. This configuration lowers initial costs and is expected to eliminate expensive maintenance, Paul Menson, director of energy-storage commercialization at GM, shared with TechCrunch. 

“The most challenging aspect to engineer was actually eliminating the part altogether,” he stated. “Remove the component, remove the issue.”

GM intends to provide sodium-ion cells to the startup, which will subsequently incorporate them into its products. However, this process will not begin immediately.

The initial GM cells are anticipated to commence trial production at the company’s Battery Cell Development Center in 2028. TechCrunch recently had an exclusive preview of this new facility, which GM believes will decrease the commercialization timeline for sodium-ion batteries by approximately one year, thereby cutting costs in the process. 

Nonetheless, GM’s sodium-ion cells remain several years away from entering commercial production. In the interim, the automaker will supply lithium iron phosphate (LFP) cells to LG Energy Solution for its energy-storage systems. LG Energy Solution is already collaborating with GM through its Ultium joint venture, which manufactures batteries for the automaker’s electric vehicles.

In addition to the collaborations with LG and Peak, GM announced it is enhancing its partnership with Redwood Materials, the battery-recycling and energy-storage startup established by former Tesla executive J.B. Straubel. 

Redwood already acquires scrap from GM’s battery production facilities and recycled battery packs from its EVs. GM has a pipeline of around 10,000 battery packs designated for Redwood, and the startup has been running a 12 megawatt/63 megawatt-hour microgrid using second-life battery packs at a Crusoe data center located in Sparks, Nevada. GM mentioned it is purchasing a 7.2 megawatt-hour Redwood system for deployment at one of its Michigan plants, which it estimates will result in savings of approximately $3 million over its lifespan.

The GM installation is described as “step one” for Redwood, according to Cal Lankton, chief commercial officer for Redwood, who expressed to TechCrunch.

Data centers, where Redwood already operates, and industrial locations like GM’s are “vastly different environments,” he noted. While data centers typically utilize batteries almost continuously to mitigate power fluctuations from GPUs, industrial sites are more inclined to employ them for reducing peak power demand, which can lead to lower monthly electricity expenses, and for providing backup power during outages.

“The factory is genuinely enthusiastic because now we have a more reliable operation,” Kelty stated. “Ultimately, we aim to have similar installations in all our factories. It just makes strong financial sense.”