Over the past year, General Motors (GM) has consistently signaled its intention to mass-produce a new generation of manganese-based batteries, aiming to break free from China's dominant position in the electric vehicle and power battery industries.

Now, the automaker has announced increased investment in next-generation battery technology, taking a novel approach by entering the booming market for AI data center energy storage. On Tuesday, General Motors stated that its venture capital arm will invest in Colorado-based startup Peak Energy, which specializes in assembling sodium-ion batteries, a type that does not contain lithium, the core metal in the vast majority of current power batteries.

Kurt Kelty, Vice President of Battery and Sustainability at General Motors, said the partnership will jointly produce large-capacity, low-cost sodium-ion batteries to provide energy storage and power supply for data centers and the electrical grid.

General Motors did not disclose the specific investment amount. When a reporter referenced the automaker's previous $30 million investment in another battery startup as a benchmark, a company spokesperson indicated that estimate was "a reasonable assumption."

Prior to GM's investment, Peak Energy had already completed two funding rounds totaling $65 million. The company's CEO, Landon Mossberg, revealed that the firm expects its revenue to reach $100 million next year.

This strategic move highlights Western nations' attempts to break free from China's monopoly in mainstream iron-based and nickel-based battery systems—systems that power everything from electric vehicles, smartphones, drones, and AI data centers to humanoid robots. A core objective for General Motors is to bypass Contemporary Amperex Technology Co., Limited (CATL), the Chinese firm that holds over 40% of the global market share.

This is also a competitive response from General Motors to its Detroit rival, Ford Motor Company. After Ford launched its grid energy storage battery subsidiary, Ford Pro, last month, its stock price surged by a cumulative 22%; during the same period, General Motors shares rose only 9%, less than half of Ford's gain.

Kelty stated, "We are exploring a path to achieve a technological leapfrog at a budget and manpower cost far lower than that of CATL. We must pursue differentiated innovation, which is the core reason we are simultaneously developing manganese-based batteries and investing in sodium-ion battery technology—to rely on technology pathways suited to the U.S. market to catch up with and surpass Chinese companies."

In May of last year, General Motors announced a major breakthrough in its lithium-rich manganese-based battery technology, planning to install it in its electric vehicles by 2028. However, as electric vehicles have not yet become a large-scale profitable business in the U.S., GM's bet on sodium-ion batteries aims to enter the rapidly expanding blue ocean markets of AI data center and grid energy storage.

Lithium Iron Phosphate (LFP) is currently the mainstream battery solution for AI data center storage, backup power, and electric vehicles. China not only monopolizes LFP production capacity but also controls the entire upstream raw material supply chain, especially lithium resources. Sodium-ion batteries contain no lithium whatsoever, offering the potential to break this resource supply constraint.

Peak Energy founder Mossberg previously worked at Tesla, Inc. and co-founded the company in 2023. At that time, a wave of sodium-ion battery startups emerged in the U.S., intending to compete with the lithium battery sector. However, over the past year, at least two similar companies have failed: Bedrock Materials and Natron Energy. Bedrock Materials' core reason for failure was its inability to compete on cost with LFP products.

Mossberg believes, however, that if calculating the total lifecycle cost over 20 years for a battery energy storage plant's construction and operation, sodium-ion batteries have a lower overall cost than LFP. LFP batteries require expensive supporting cooling equipment, whereas sodium-ion batteries are inherently much safer and do not need complex refrigeration systems. Additionally, sodium-ion batteries have a significantly longer cycle life than LFP batteries.

Furthermore, LFP technology is already mature, while sodium-ion batteries are still in the early stages of product deployment with substantial room for optimization and improvement. Mossberg noted that many of the mature refinement processes that drove LFP commercialization can be adapted and applied to sodium-ion technology. "We need targeted fine-tuning of processes. There are some differences between the two battery types, but a lot of the technical logic adapted for lithium systems also applies to sodium systems. This means the iteration speed for sodium-ion technology can be very fast," he said.

Leading Chinese battery firms have long targeted the sodium-ion sector, with CATL and BYD Company Limited being the first to achieve mass production of sodium-ion cells. However, General Motors and Peak Energy claim that Peak is the first company to have developed a scalable grid-level sodium-ion battery solution ready for deployment.

Kelty stated that the partnership has completed laboratory-level sodium-ion cell development, with several key performance indicators surpassing similar products from CATL and BYD. The next step involves scaling up production of the sodium-ion cells using GM's small pilot production line. The partners have preliminary plans to later build a large-scale grid energy storage battery factory, but a definitive timeline has not been set.

To completely break free from dependence on the Chinese supply chain, General Motors and Peak Energy must achieve in-house cell production. Currently, Peak Energy still sources many of its cells from China. Mossberg admitted that the startup lacks the capability to independently build a cell factory, and the partnership with General Motors will provide the necessary funding to establish a domestic production line.

"We will not build the pilot line ourselves, nor will we fully fund a large cell factory, at least not at this stage," Mossberg said. "We hope to rely on partners to advance capacity construction. General Motors is undoubtedly an excellent partner that can help us establish local manufacturing."