Initially Tesla, followed by Ford, and now GM — it seems that every vehicle manufacturer is eager to enter the energy storage sector.

This enthusiasm is understandable. While sales of electric vehicles have plateaued in the U.S., the demand for large, stationary batteries has doubled over the past two years and shows no sign of slowing down.

Even with the reduction of incentives in the One Big Beautiful Bill Act, the Solar Energy Industries Association predicts annual installations will surpass 110 GWh by 2030, nearly doubling current figures.

“There’s immense potential for this market,” Kurt Kelty, vice president of battery and sustainability at GM, shared with TechCrunch. 

GM has experimented with energy storage before, but on Tuesday, it made a significant move by introducing a new sodium-ion battery chemistry targeting the core of the market.

The rapidly growing energy storage sector is being propelled by the intersection of three trends. The most apparent is the rise of data centers built to support AI, with energy demand from data centers expected to nearly triple by the decade’s end. Concurrently, numerous sectors of the economy, including transportation, manufacturing, and HVAC, are transitioning to electric systems. 

“Data centers contribute significantly to this growth, but even without them, the market was already gaining momentum,” Kelty remarked.

It’s not only automobile manufacturers that are venturing into energy storage. Startups have been securing substantial funding to capture a share of the market. Base Power raised $1 billion in Series C funding in October to extend operations beyond Texas, while Lunar Energy amassed $232 million to provide batteries to homeowners. Other companies, such as Lightship, are making adjustments; the electric RV producer is now offering a mobile battery solution for job sites and locations requiring temporary power.

Currently, Tesla dominates the energy storage market. Last year, of the 57 gigawatt-hours installed, Tesla accounted for 82% of the installations. Its annual revenue from energy generation and storage has doubled since 2023, chiefly due to the growth of Megapack and Powerwall installations. Tesla’s gross profits for this segment are around 30%, roughly double what it earns from selling electric vehicles and at least three times greater than typical automaker margins. GM’s gross margin over the past 15 years has been just above 11%.

However, in light of the market’s potential, GM isn’t hurrying to join in. Instead, its primary product, the sodium-ion cells, won’t be available until later in the decade. “We intend to develop a family of cells suitable for this market,” Kelty noted.

Kelty and his team highlight the advantages of sodium-ion as justification for their patience: The materials are inexpensive and plentiful, active cooling systems are unnecessary, and these cells can endure many more charge-discharge cycles compared to lithium-ion batteries. 

Moreover, unlike other battery chemistries, China hasn’t monopolized the materials needed for sodium-ion batteries. Nearly all cobalt globally is processed by Chinese companies, for instance.

“This provides us a pathway to supply-chain resilience and low-cost materials,” Andy Oury, business planning manager at GM, informed TechCrunch. “Sodium-ion is still very much in its early stages, with plenty of opportunities to grow the supply chain anywhere there’s investment.”

GM could have opted for an easier route by simply repackaging the lithium-ion cells it produces in its gigafactories, as Tesla and Ford have. Nevertheless, the automaker remains optimistic about the future of electric vehicles and doesn’t want to divert its lithium-ion production capacity for fear of being unprepared if the EV market experiences a resurgence.

“It’s one thing to manufacture cells when there’s excess capacity,” Oury stated. “It’s a different challenge when we shift back to a high-growth environment, and every new battery required needs a new manufacturing facility.”

Such a resurgence could be partially influenced by GM. The company is developing a completely new battery chemistry, lithium-manganese-rich (LMR), expected to launch in 2028. LMR aims to provide most of today’s range while reducing new EV costs by approximately 10%. This would bring electric vehicles closer to being on par with fossil fuel cars, addressing one of the major barriers to adoption. 

Following LMR, sodium-ion could be another chemistry that shakes up the automotive sector. Chinese manufacturers have already begun exploring this option. EVs using sodium-ion batteries are heavier and have a shorter range, but they are more affordable and less likely to catch fire. Additionally, they demonstrate the potential for rapid charging. Collectively, these features create an appealing option for lower-cost electric vehicles.

“Is this the right strategy for EVs in the long term? That’s still up for debate,” Kelty commented. “It does give us the advantage that if we choose to pursue that direction, it will be quite straightforward for us since we are already conducting extensive research in this area. We’re not dismissing it.”

However, the risk in proceeding more cautiously than competitors is that the AI bubble may burst, data center developments could slow, and GM might miss the opportunity. Paul Menson, director of energy storage commercialization at GM, believes that investing in sodium-ion will yield dividends even in the event of a downturn. “No market grows infinitely forever,” he remarked. “That’s why having the best product is crucial. If you have the top product, market contractions won’t affect you as significantly.”

Nevertheless, Kelty feels a sense of urgency. “We are actively investigating other methods to enter the market more swiftly,” he said. “We are definitely aiming to move as quickly as possible.”