GM has announced a new energy company to support its electric vehicle (EV) market in a move that mirrors Tesla’s approach. But will this become the norm for automakers in the United States? As new lines of all-electric vehicles require an extensive support network – including battery production, mineral mining, charging stations and more, automakers are looking to expand their role and break into the energy industry to sustain their automotive activities.
Electric vehicle company Tesla Motors is seen by many as more than just an automaker, stint in the energy and technology sectors with its products and services. Early on, Tesla launched a charging network, which now has more than 30,000 global superchargers where drivers can charge their Tesla cars in about 15 minutes, to support EV adoption at a time when it was less common. . Tesla established its power generation and storage business in 2015, launching a line of home batteries, which could be charged using solar power, providing backup to the main grid. Additionally, Tesla has developed a series of solar panels and an all-solar roof.
Tesla has also decided to buck the trend of traditional automakers by selling its vehicles directly to consumers, rather than through franchised dealerships. Tesla founder Elon Musk has won a wide following for his innovative designs and decisive leadership, as have several major tech companies. His foray into space travel has made him more popular than ever, with people watching to see what he will create next.
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As the first car manufacturer to switch to, among other things, energy company, Tesla has laid the foundation that other automakers can build on. But, although it was the first to launch a full range of electrical and energy products, it will not be the last, as other companies are hot on its heels. General Motors (GM) this month announced plans to launch its energy business through its GM Energy unit, in competition with Tesla.
Travis Hester, Managing Director of Electric Vehicle Growth Operations, declared of the move, “We’re getting into the whole energy management ecosystem.” He explained: “Our competition in this space on the [automaker] side is really just Tesla, which is a solid power management company… There’s a lot of analogies you can make with Tesla. Tesla’s energy business lost $129 million on revenue of $2.8 billion in 2021. Meanwhile, GM hopes its business development will help it double its annual revenue. turnover of 280 billion dollars by 2030.
GM estimates the potential market for energy storage and management to be between $120 billion and $150 billion. The automaker will launch its Ultium Charge 360 public charging service alongside Ultium Home and Ultium Commercial. Its Ultimate Home service will offer stationary storage batteries, solar panels and hydrogen fuel cells. The model is similar to Tesla’s Powerwall home energy service. GM plans to launch this product in late 2023 alongside the introduction of its first Chevrolet Silverado EV truck. The new electric truck should be able to send electricity back into the home grid in the event of a breakdown, as has already been the case with Ford’s F-150 Lightning following its partnership with Sunrun.
The major automaker hopes to set up a system of microgrids that connect to hydrogen fuel cells, to provide carbon-free energy. GM is also partnering with SunPower to offer consumers solar panels to boost renewable energy production. The company will also work closely with Pacific Gas and Electric (PG&E) and Con Edison, with plans to quickly develop more partnerships to ensure all areas of energy expertise are represented.
GM’s adoption of hydrogen technology sets it apart from Tesla, with Musk having openly stated his opposition to hydrogen and hydrogen fuel cells, calling the technology “extremely stupid.” Major automakers entering the renewable energy market could become very competitive with Tesla, especially if they expand their energy businesses to include green hydrogen as well as solar and other renewable energy sources.
While GM is the latest automaker, and perhaps one of the most notable, to venture into the energy industry, other automakers have already created energy companies in recent years. German luxury automaker Mercedes-Benz established its US energy division in November 2017, with BMW, Ford and other automakers also launching their own energy storage and vehicle-to-grid pilots the same year. Mercedes-Benz Energy Americas in partnership with solar panel distributor Vivint Solar, with Vivint COO Brian Christensen explaining “Looking at how industries are changing, I think there’s a really good fit between the automotive industry and the House.”
After years of Tesla’s leadership in the U.S. electric power market, GM and other automakers are now looking to compete with the electric vehicle giant by expanding their businesses through strategic partnerships with energy and technology companies. With the potential to benefit not only from the automotive sector, but also from the associated battery storage, charging and renewable energy sectors, we can expect many other automakers to replicate this model over the next decade.
By Felicity Bradstock for Oilprice.com
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