Why is GM launching a New Business Unit to Connect EV chargers to Homes and Businesses

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Why is GM launching a New Business Unit to Connect EV chargers to Homes and Businesses

GM recently announced the formation of a new business unit, GM Energy, to offer stationary battery packs, solar panels, electric vehicle chargers and other energy-management products for homes and businesses. GM wants to leverage its battery and software tacit expertise it has gained developing electric vehicles. GM has two goals for this new business unit:

A> Double Annual Revenue to $280 Billion by 2030, by creating a sustainable business

B> Manage the customer experience when they purchase an EV

According to Travis Hester, vice president of GM’s EV growth operations, “If you have a sudden unexpected power outage, then you can use your vehicle or your stationary storage box to be able to power your home or small business,”. 

GM suggests that the value add for both consumers and businesses is "resiliency", as the batteries can feed energy back into a regional power grid during a heat wave or other event.

Why go in this business and with whom?

The TAM or Total Addressable Market that GM is going is estimated $125 Billion - $250 Billion, according to Hester. He further shared that GM has signed up a series of partners that will help it deliver products and services and integrate its offerings into the grid.

Pacific Gas & Electric (PG&E), Con Edison and and SunPower are just a few partners that have been announced. PG&E is working on a pilot with GM, where EVs can charge at night when rates are low and potentially provide energy back to the grid during peak hours. This is done through a a “bi-directional charger,”, which the two companies want to have commercially available by 2023.

“The business fundamentals behind this are very solid,” Hester said, adding that energy management can save commercial customers hundreds of thousands of dollars a year and provide additional savings, if not income, for consumers.

What about Competitors?

The most common name in this space by far is of course Tesla. Tesla has offered charging, solar and energy storage for several years now and it continues to perfect the product, both from a price and scale perspective. 

Ford Motor is also entering the space by partnering with PG&E for its electric F-150 Lightering truck. Similar to GE and SunPower, Ford has partnered with Sunrun to install the home energy systems, which began early in 2022.

Will GM succeed?

GM believes the differentiator will be the product and services, the company refers to as “energy management,” including hardware such as batteries, solar panels, hydrogen fuel cells and cloud-based software that can link these offerings with electric vehicles and utility companies seamlessly. The products can be tailored for individual homeowners as well as businesses, including companies operating fleets of electric vehicles.

The commercial operations are already underway, while home energy systems will be available starting next year as the 2024 Chevrolet Silverado EV goes on sale. 

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