Powering the Grid: Why Global Automakers Are Snapping Up the Battery Storage Market

First it was Tesla, then Ford, and now GM. Every major automaker wants a piece of the massive energy storage market. The motivation behind this shift is easy to see. While electric vehicle sales hit a temporary plateau in the United States, sales of massive, stationary utility batteries doubled over the last two years, and this trend shows zero signs of slowing down.

Even with changes to major federal clean energy subsidies, the Solar Energy Industries Association predicts that yearly installations will soon blow past 110 gigawatt-hours by 2030, which is double where the market sits right now. Kurt Kelty, vice president of battery and sustainability at GM, noted that the team sees massive potential in this space. GM has played around with energy storage before, but they just made a major play by rolling out an entirely new sodium-ion battery chemistry aimed straight at the heart of the grid utility market.

This skyrocketing energy storage boom is moving forward thanks to three major factors. The most obvious driver is the aggressive expansion of massive data centers built to handle heavy artificial intelligence processing. Data center energy demand will likely triple by the close of the decade. Alongside that massive tech expansion, huge sections of the broader economy, including traditional shipping fleets, manufacturing plants, and industrial heating and cooling systems, are switching entirely to electric power. Kelty explained that while data centers represent a massive piece of this growth, the broader industrial transition was already moving fast on its own.

Automakers are not the only ones jumping into the grid storage arena. Emerging startups are pulling in massive funding rounds to secure their own piece of the market. Base Power recently closed a $1 billion Series C funding round to expand its grid hardware footprint outside of Texas, while Lunar Energy successfully raised $232 million to sell specialized home battery storage systems directly to property owners. Other players are executing clever strategic pivots, like electric commercial truck brands that now sell heavy mobile battery packs to construction sites and industrial zones that lack permanent electrical hookups.

Right now, Tesla commands the absolute lion’s share of the stationary storage market. Out of the 57 gigawatt-hours of hardware deployed last year, Tesla built 82 percent of those total installations. The company now generates massive recurring revenue from its utility energy division, mostly because of skyrocketing global sales for its industrial Megapack systems and residential Powerwall units. Tesla reports gross profit margins of roughly 30 percent on these energy products, which is double what it earns on actual car sales and three times higher than traditional automotive manufacturing margins. Over the last 15 years, GM has maintained a gross margin of just over 11 percent, showing why the financial allure of grid storage is so powerful.

Despite the massive financial potential, GM is moving carefully rather than rushing its hardware to market. Its first major sodium-ion product will not land on the market until late in the decade. Kelty stated that the company will focus on building a safe, dependable battery architecture that fits the long lifespan requirements of the utility market.

GM believes sodium-ion chemistry is worth the long wait. The raw materials are incredibly cheap, easy to find, and do not require complex liquid cooling setups. These packs can handle significantly more charge and discharge cycles over their lifespan than standard lithium-ion hardware. Furthermore, global supply chains for sodium are far less consolidated. Right now, Chinese companies process almost all of the world’s cobalt, creating a massive bottleneck for traditional EV batteries. Sodium-ion gives automakers a clear path to build domestic supply chain resilience using cheap materials.

GM could have taken a simpler path by packaging its current lithium-ion cells into big metal boxes, similar to what Tesla and Ford currently do. However, the automaker wants to save its current lithium production capacity exclusively for cars, ensuring it can handle a sudden resurgence in electric vehicle demand without building massive new factories from scratch. The company is also working on a separate lithium-manganese-rich chemistry slated for a 2028 debut, which promises to deliver excellent driving range while slashing vehicle manufacturing costs by 10 percent.

For now, sodium-ion will focus entirely on stationary grid storage. While Chinese automakers are starting to put these packs into small commuter cars, the batteries are still too heavy and lack the high energy density needed for long-distance driving. However, they are cheap, safe, and charge incredibly fast, making them an excellent match for stationary power banks. While moving slow brings the risk of missing out on early data center contracts if the current AI infrastructure boom peaks early, GM believes holding out for the best, safest hardware chemistry will pay off over the long haul.