Why GM's Newest Strategy Could Top Rival Ford
Written by Daniel Miller for The Motley Fool -> Automakers are finding new ways to use their battery technology. Energy storage is an easy way for automakers to develop new revenue streams. Energy storage systems can open up higher-margin business, and perhaps more lucrative v
Automakers are finding new ways to use their battery technology.
Energy storage is an easy way for automakers to develop new revenue streams.
Energy storage systems can open up higher-margin business, and perhaps more lucrative valuations.
Detroit automakers Ford Motor Company (NYSE: F) and General Motors (NYSE: GM) are taking a page out of electric vehicle (EV) giant Tesla 's (NASDAQ: TSLA) playbook. Last month, Ford announced that Ford Energy, a wholly owned subsidiary, will provide the U.S. market with battery energy storage systems (BESS) for utilities, large industrial and commercial customers, and artificial intelligence (AI) data centers. Let's take a look at GM's equivalent announcement, why it could have an advantage over Ford, and, using Tesla as an example, understand the new revenue stream's potential.
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A look at rival Ford Energy. Image source: Ford Motor Company.
GM's recent partnership with Peak Energy to develop next-generation sodium-ion battery cells will be used for grid-scale energy storage strategies. The agreement calls for GM to develop the sodium-ion cells in its Michigan battery labs, and the automaker will retain exclusive manufacturing rights. GM has invested in Peak Energy, and the latter will use the battery cells in its storage systems as it accelerates U.S. production.
It sounds very similar to Tesla and Ford Energy, but the energy storage market is largely using lithium-iron phosphate (LFP) batteries. Peak Energy and GM, however, believe that the sodium-ion battery composition could deliver a lower-cost alternative for grid applications and storage, where energy density is less important than in EVs, giving it an advantage in cost, reliability, and safety.
