GM targets energy storage growth with new sodium-ion chemistry

General Motors (GM) is entering the energy storage market with a new sodium-ion battery chemistry, a move driven by the convergence of data center energy demand and broader electrification trends. While electric vehicle (EV) sales have stagnated in the United States, the stationary battery market is seeing rapid growth, with sales of large, stationary batteries doubling in the past two years. This demand is driven by the expansion of data centers built for artificial intelligence, with energy demand expected to nearly triple by the end of the decade, alongside the electrification of transportation, manufacturing, and HVAC systems. However, GM’s sodium-ion cells will not be ready until later this decade.

The stationary storage market is currently dominated by Tesla, which was responsible for 82% of the 57 gigawatt-hours installed last year. Tesla’s growth has been driven by its Megapack (Tesla’s large-scale energy storage product) and Powerwall (Tesla’s residential energy storage product) installations, yielding gross profits of around 30% for its energy segment. This is significantly higher than GM’s average gross margin of just over 11% over the last 15 years. Startups are also raising significant capital to capture market share; Base Power raised a $1 billion Series C funding round to expand beyond Texas, while Lunar Energy raised $232 million to sell batteries to homeowners.

Rather than repackaging existing lithium-ion cells, GM is opting for sodium-ion to ensure supply-chain resilience and avoid diverting lithium-ion capacity away from its EV manufacturing. According to Andy Oury, business planning manager at GM, “It gives us a path towards supply-chain resilience and low-cost materials,” especially as China has not yet cornered the market for sodium-ion materials. While sodium-ion offers cost and safety benefits, it comes with specific trade-offs: EVs powered by sodium-ion packs are heavier and have less range, but they’re cheaper and less prone to catching fire. For its automotive lineup, GM is also developing a lithium-manganese-rich (LMR) chemistry set to debut in 2028, which is expected to cut the cost of a new EV by about 10%.

GM leadership remains deliberate but optimistic. Kurt Kelty, vice president of battery and sustainability at GM, stated that the market holds significant potential, though the automaker is actively exploring other ways to accelerate its entry into the sector. Paul Menson, director of energy storage commercialization at GM, emphasized that having the best product protects against potential market contractions, noting that no market grows indefinitely.

Why it matters

GM is entering the energy storage market with a new sodium-ion battery chemistry to diversify its supply chain and avoid diverting lithium-ion capacity, aiming to capitalize on the surging demand for stationary energy storage driven by AI data centers and electrification.