The race to secure power supplies for AI data centers has spread to some unusual places, including the automotive world.
Battery recycler Redwood Materials started the trend last year with a new energy storage division and a project it attached Old electric vehicle packages to a Crusoe data center in snowfall Then Ford said it was reusing some of its battery manufacturing capacity to manufacture grid-scale batteries. And now GM is announcing its own, possibly more ambitious plans for an energy storage system (ESS).
GM on Tuesday unveiled two new phases in its attack on the energy storage market. The biggest change, by far, is GM’s new partnership with an energy storage startup. Peak energy. For that partnership, GM is developing an entirely new sodium-ion battery chemistry tailored for grid-scale deployments.
Outside of China, no automaker has announced plans to build sodium ion cells.
“The way we are entering the market is the easiest way, through ESS,” Kurt Kelty, GM’s vice president of batteries and sustainability, told TechCrunch. “The performance characteristics are just what is needed in that market.”
GM declined to share with TechCrunch how much money it is investing in this energy storage effort. But we do know that the company has committed $900 million to commercialize new battery chemicals, an investment that includes a new battery development center.
Sodium-ion batteries work similarly to lithium-ion batteries, but swap out key materials to make the cells cheaper, longer-lasting, and less likely to overheat. The downside is that sodium ion batteries must be larger and heavier to store the same amount of electricity.
Peak Energy has already been working on energy storage systems that use sodium ion batteries. Because sodium-ion batteries behave differently than lithium-ion batteries, Peak has developed an energy storage system with that in mind. Their grid-scale batteries have no cooling systems or fire suppression systems because there is less risk of overheating. The setup reduces upfront costs and should also eliminate costly maintenance, Paul Menson, GM’s director of energy storage marketing, told TechCrunch.
“This is the manifestation that the hardest part of designing is not having any pieces,” he said. “Remove the part, eliminate the problem.”
GM plans to sell sodium ion cells to the startup, which will then integrate them into its products. But that won’t happen right away.
GM’s first cells are expected to enter trial production at the company’s Battery Cell Development Center in 2028. TechCrunch recently received an exclusive view of the new facility, which GM expects will shave about a year off the commercialization process for sodium-ion batteries, reducing costs in the process.
However, GM’s sodium ion cells are still years away from commercial production. Meanwhile, the automaker will sell lithium iron phosphate (LFP) cells to LG Energy Solution for use in its energy storage systems. LG Energy Solution already works with GM through its Ultium joint venture, which makes batteries for the automaker’s electric vehicles.
In addition to partnerships with LG and Peak, GM announced it was expanding its work with Redwood Materials, the energy storage and battery recycling startup founded by former Tesla executive JB Straubel.
Redwood already buys scrap metal from GM’s battery factories and used battery packs from its electric vehicles. GM has a backlog of about 10,000 packages it is shipping to Redwood, and the startup has been operating 12 megawatt/63 megawatt-hour migration grid using second-life packages at a Crusoe data center in Sparks, Nevada. GM said it is purchasing a 7.2-megawatt-hour Redwood system for use at one of its plants in Michigan, which it estimates will save about $3 million over its lifetime.
The GM facility is “the first step” for Redwood, Cal Lankton, Redwood’s chief commercial officer, told TechCrunch.
Data centers, where Redwood already operates, and industrial sites like GM’s are “very different things,” he said. While data centers may use batteries almost continuously to absorb some of the power fluctuations from GPUs, industrial sites are more likely to use them to reduce peak power demand, which can reduce monthly energy bills, and use them to provide backup power in the event of an outage.
“The factory is very excited because we now have a more reliable factory,” Kelty said. “Ultimately, we will have similar facilities like this in all of our factories. It just makes economic sense.”
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