General Electric Company may be planning to compete more strongly with Tesla Motors Inc in the energy storage market. The industrial firm is reportedly aiming to play a bigger role in energy storage.
GE using changed strategy
GE’s head of energy storage, Jeff Wyatt told Reuters that the firm could buy related firms to better its strategy in the segment. Wyatt noted that even without an acquisition, the firm is capable enough to make a mark in the market, which is highly fragmented, but expensive. GE expects the market to grow four-times in the next five years.
“We believe in the space and its ability to grow,” Wyatt told Reuters, adding, “We think we can be a sizable player within it, and that’s really what we’re intending to do.”
GE, earlier this year, slashed its production for the Durathon industrial batteries, lowering the headcount from 200 to 50 at its New York plant. The tech firm is aiming to better the performance of its batteries by managing its chemical degradation.
Since past one year, GE has worked to transform its energy storage market strategy, as it witnessed weak demand for the batteries it makes. In its new energy storage package, GE is giving users an option to use lithium-ion batteries from other brands.
“We think we have a competitive offering,” Wyatt said. “We think we can carve out and capture share within it.”
Tesla Motors grabs a big deal
At a time, when GE is coming to the market with changed strategy, Tesla is ramping its efforts to bag more deals. Recently, the EV maker inked a deal to develop battery storage systems for three Escondido high schools.
The Escondido schools havie been able to avoid big power bills owing to its efforts of replacing old heating and AC units. The school also replaced its lights systems with the more efficient ones. In the past two years, the school has been able lower its demand for power by 958,000 KW hours, but its power bill has moved up 13% from $1.43m in 2013-14 to $1.62m in the latest year.
With the Tesla Motors project, school officials will be hoping to save thousands of dollars in power costs.
In April, Tesla came out with its home and industrial battery packs to help home, businesses and governments with backup power to save on the electricity costs. The deal with the school is expected to be the first big one for Tesla.
On Monday, Tesla shares closed down 4.67% at $253.01, and year to date the stock is up almost 14%. GE shares were up 0.82% at $25.96, and year to date the stock is up over 1%.