30% Margins Send GM Chasing Tesla's Battery Business

Tesla’s energy storage business has become the prize Detroit can’t ignore, because stationary batteries now offer growth and margins that EVs are struggling to deliver. First came Tesla, then Ford, and now GM is making a larger move into grid batteries as AI data centers and electrification push electricity demand higher.

The shift is less about automakers finding a side business and more about who controls the next layer of power infrastructure, according to TechCrunch. Vehicles still matter. But the hotter fight may be over the battery systems that help power data centers, homes, factories, and utilities.

Tesla’s Megapack Lead Turned Batteries Into Detroit’s New Target

Tesla has already shown why energy storage is attractive. Of the 57 gigawatt-hours of energy storage installed last year, Tesla accounted for 82% of those installations, according to TechCrunch. Its annual revenue from energy generation and storage has doubled since 2023, driven largely by Megapack and Powerwall growth.

The margin gap explains the rush. TechCrunch reports Tesla’s gross profits in energy storage are around 30%, roughly double what it makes selling EVs and at least three times higher than typical automaker margins. GM’s gross margin over the last 15 years has averaged just over 11%.

That changes the strategic frame. If Tesla can earn higher margins selling batteries to the grid than selling cars into a crowded EV market, other automakers have to ask why their battery investments should be limited to vehicles. XOOMAR analysis: this is the real signal behind GM’s move. Automakers don’t just want to sell more packs. They want their battery supply chains to produce revenue even when EV demand cools.

“There’s a lot of potential for this market,” Kurt Kelty, vice president of battery and sustainability at GM, told TechCrunch.

This follows the same pressure point we covered in AI Power Crunch Pulls GM and Ford Into Energy Storage: AI power demand is pulling car companies toward infrastructure whether or not they planned to get there this quickly.

AI Data Centers Are Pulling Stationary Batteries Into the Center of the Market

The demand story starts with AI data centers, but it doesn’t end there. TechCrunch reports that data center energy demand is expected to nearly triple by the end of the decade. At the same time, transportation, manufacturing, and HVAC are being electrified.

That combination matters because large stationary batteries become more valuable when power demand rises and timing becomes harder to manage. Tesla put the point plainly in separate TechCrunch-supplied source material, saying storage can “stabilize the grid, shift energy when it is needed most and provide additional power capacity” as AI infrastructure drives load growth.

Kelty pushed back against the idea that this is only an AI story.

“Data centers are a big part of the growth, but even without data centers, it started to really pick up,” Kelty said.

XOOMAR analysis: that makes the market more durable than a pure AI capex trade. If data center construction slows, electrification still supports demand for storage. If AI growth continues, the urgency rises. Either way, batteries move from clean-energy accessory to power-capacity product.

The Storage Math Looks Better Than the EV Math Right Now

The market numbers are blunt. While EV sales have stagnated in the United States, sales of large stationary batteries have doubled in the past two years, TechCrunch reports. The Solar Energy Industries Association expects annual installations to exceed 110 GWh per year by 2030, about double today’s level, even after incentives were gutted in the One Big Beautiful Bill Act.

Tesla’s own results show why investors are paying attention. In related TechCrunch-supplied material, Tesla deployed a record 46.7 gigawatt-hours of energy storage products in 2025, up 48% from the prior year. Storage and energy generation revenue rose 26.5% to $12.8 billion, with gross margin at 29.8%.

A useful contrast:

The counterpoint is real. Storage projects can be lumpy. Related TechCrunch-supplied material notes that large storage project revenue is often recognized when milestones are hit. Policy changes, tariffs, and battery cell prices can also pressure the business. Still, the margin profile explains why automakers are willing to enter a market Tesla currently dominates.

GM Is Choosing Sodium-Ion Instead of Chasing Tesla With Today’s Cells

GM is not simply repackaging the lithium-ion cells it already makes. On Tuesday, the company rolled out a new sodium-ion battery chemistry aimed at stationary storage, though the cells won’t be ready until later this decade.

That delay looks risky, but GM has a reason. Sodium-ion uses cheap and abundant materials, does not require an active cooling system, and can withstand many more charge-discharge cycles than lithium-ion batteries, according to TechCrunch. It also gives GM a path away from supply chains where China has already built dominant positions in other chemistries. TechCrunch notes that nearly all of the world’s cobalt is processed by Chinese companies.

“It gives us a path towards supply-chain resilience and low-cost materials,” Andy Oury, business planning manager at GM, told TechCrunch. “Sodium-ion is very much in its infancy with the opportunity for the supply chain to grow anywhere people want to invest in it.”

GM’s restraint also reflects its EV bet. The company does not want to pull lithium-ion capacity away from vehicles in case EV growth returns. Oury framed the trade-off directly.

“It’s one thing to build cells when there’s excess capacity,” Oury said. “It’s another thing when we return to a high-growth mode and every new battery you want needs a new plant.”

That connects with our earlier coverage of how GM Bets $900M on Sodium-Ion Batteries for AI Power. XOOMAR analysis: GM is trying to avoid fighting Tesla on Tesla’s current terms. It’s betting that a lower-cost, more supply-resilient chemistry can open a different path into the same market.

Ford, Startups, and GM Are Chasing a Market Tesla Validated

Tesla is not the only company moving. TechCrunch reports that Ford has entered the market, while startups are also raising large rounds. Base Power raised a $1 billion Series C in October to expand beyond Texas. Lunar Energy raised $232 million to sell batteries to homeowners. Lightship, originally focused on electric RVs, is now selling a mobile battery for job sites and other temporary-power locations.

The stakeholder map is getting crowded, but not all players occupy the same role. Tesla is defending a lead. GM is developing chemistry. Ford is entering storage. Startups are attacking residential and mobile use cases. Utilities and data centers, as framed by the source material, are mainly demand drivers or customers rather than direct automaker competitors.

The strongest skepticism sits with GM’s timeline. If the market is accelerating now and GM’s sodium-ion cells arrive later this decade, Tesla, Ford, and startups get time to entrench products and relationships. TechCrunch states the risk plainly: the AI bubble could burst, data center construction could halt, and GM could miss the wave.

GM’s answer is product quality.

“No market grows indefinitely forever,” Paul Menson, director of energy storage commercialization at GM, said. “That’s why you have to have the best product. Because if you have the best product, it doesn’t really matter what happens in the market contraction because you still have the best product.”

Tesla Sets the Benchmark, but GM Is Betting the Chemistry Race Is Still Open

Tesla will not own grid batteries alone. The market is growing too quickly, and the profit pool is too visible. But Tesla has already set the reference point: high-volume installations, strong storage margins, and a business that can offset pressure in EVs.

GM’s bet is different. It is accepting a slower start in exchange for sodium-ion characteristics that may matter in stationary storage: cheaper materials, durability, simpler cooling, and supply-chain flexibility. The company is also keeping an eye on EVs. GM is developing lithium-manganese-rich, or LMR, chemistry for 2028, which TechCrunch says could deliver most of today’s range while cutting the cost of a new EV by about 10%.

Kelty left the door open to sodium-ion vehicles too.

“Is this the right play for EVs in the long run? That’s yet to be decided,” Kelty said. “It does give us the advantage that if we want to go that direction, it’ll be very easy for us because we’re going to be right doing a lot of research on this anyway. We’re not ruling it out.”

The evidence to watch is simple. GM needs to show it can bring sodium-ion cells to market fast enough to matter, at costs that justify waiting. Tesla needs to prove its storage margins can hold as competition rises and policy support changes. If annual installations move toward the 110 GWh level SEIA expects by 2030, automakers that treat batteries only as EV components will look late. The next auto industry fight may be decided as much at battery sites and data center campuses as in showrooms.

The Bottom Line

• Tesla’s battery business shows automakers can earn higher margins outside traditional vehicle sales.
• Rising power demand from AI data centers and electrification is making grid storage a strategic growth market.
• GM’s move suggests Detroit wants battery supply chains to generate revenue even if EV demand slows.