GM joins race to build batteries for AI data centers and the grid

In a surprising crossover between the automotive sector and the energy storage industry, General Motors (GM) is making significant strides to power AI data centers through innovative battery solutions. This movement was initially sparked by battery recycler Redwood Materials, which launched an energy storage division last year, integrating old electric vehicle (EV) batteries into a data center in Nevada. Following suit, Ford also announced its plans to repurpose its battery manufacturing capabilities to develop large-scale batteries for the energy grid. Now, GM is stepping up its game with ambitious new developments in energy storage systems (ESS), revealed in a recent announcement. The highlight of GM's strategy is a partnership with energy storage startup Peak Energy, aimed at creating a new sodium-ion battery chemistry specifically designed for grid-scale usage. This marks a pioneering move, as no other automaker outside of China has disclosed intentions to manufacture sodium-ion cells. Kurt Kelty, GM's vice president of battery and sustainability, explained to TechCrunch, "The way we’re getting into the market is the easy way, through ESS. The performance characteristics are just what is needed in that market." While GM has not disclosed the exact financial commitment for this energy storage initiative, the company has earmarked $900 million to develop new battery technologies, which includes the establishment of a new battery development center. Sodium-ion batteries operate similarly to their lithium-ion counterparts but utilize different materials to reduce costs, enhance longevity, and mitigate overheating risks. However, they also require larger and heavier designs to store equivalent electricity amounts. Peak Energy has been developing energy storage systems that leverage sodium-ion technology, tailoring their products to accommodate the unique characteristics of these batteries. Their systems notably lack cooling and fire suppression mechanisms due to the reduced overheating risk, resulting in lower initial costs and streamlined maintenance, as noted by Paul Menson, GM's director of energy storage commercialization. GM is set to supply sodium-ion cells to Peak Energy, which will incorporate them into its energy solutions. However, the first batch of these cells is not anticipated to enter trial production until 2028 at GM's Battery Cell Development Center. This facility aims to accelerate the commercialization timeline for sodium-ion batteries while driving down costs. While sodium-ion technology is still years from market readiness, GM will continue to supply lithium iron phosphate (LFP) cells to LG Energy Solution for its energy storage systems. LG is already a partner of GM through their Ultium joint venture, which produces batteries for GM's electric vehicles. In addition to partnerships with Peak Energy and LG, GM is expanding its collaboration with Redwood Materials. The startup, founded by former Tesla executive J.B. Straubel, currently procures scrap materials from GM's battery manufacturing lines and used EV battery packs. GM plans to send approximately 10,000 battery packs to Redwood, which operates a 12 megawatt/63-megawatt-hour microgrid at a data center in Sparks, Nevada. Furthermore, GM has invested in a 7.2 megawatt-hour Redwood system for one of its Michigan plants, projected to save the company around $3 million over its operational lifespan. This installation is just the beginning, as GM envisions similar projects across all its factories, boosting reliability and making economic sense in the long term. "The factory is really excited because now we’ve got a more reliable factory," Kelty emphasized, highlighting the strategic importance of these energy storage solutions for GM's manufacturing capabilities.