A pioneering grid-battery factory is headed for this California city

Startup Peak Energy launched in 2023 with a promise to bring the up-and-coming sodium-ion battery chemistry to American shores. Now, it’s building a gigafactory in Sacramento, California, that will be the country’s first to produce sodium-ion battery storage plants for the grid.

If Peak Energy succeeds in its broader mission, it will introduce a new generation of batteries better suited for grid storage than the dominant lithium-ion chemistries, which are effectively hand-me-downs from electric vehicles. These sodium-ion batteries can run safely at a broad range of temperatures, company leaders say, meaning they can operate more cheaply and durably than the lithium-ion phosphate (LFP) cells that have become the go-to for stationary storage.

“We’ve gone from proving the technology out and having really great interest to having contracted business with customers that we have to go deliver on,” said Peak’s CEO and co-founder Landon Mossburg. Chinese battery companies have begun scaling sodium-ion production in recent years, but the technology hasn’t broken into the Western power sector yet. Peak is at the forefront of startups trying to make that happen.

Peak assembled a cohort of interested developers to observe the design and piloting of its storage technology, which it installed at a Colorado testing facility last year. Several power producers signed up for small pilot installations this year, with much bigger orders teed up for 2027. So far, the company has worked with manufacturers in China to supply cells to its specifications and then assembled them into containers at its existing facility in Burlingame, California. That site can produce only 100 megawatt-hours per year — roughly 32 units at 3.1 megawatt-hours each — as a function of its size and reliance on some manual work rather than full automation.

That output won’t suffice in an era when a single battery project may need several times the Burlingame site’s annual production. The Sacramento factory will produce 40 times more, 4 gigawatt-hours per year, when it starts its highly automated production, planned for the first quarter of 2027. Once assembled, the 100,000-pound containers can slip right onto the highway for shipment to customers.

It’s a quick turnaround as far as factory buildouts go, made possible because Peak found a newly built shell to lease in an industrial park near the Sacramento airport, said Mossburg. The site already had power supply from the Sacramento Municipal Utility District, so Peak can drop in its manufacturing equipment with only minor upgrades to the structure and electrical service, he added. It also helps that the factory won’t be doing the highly technical cell fabrication, which takes longer to install.

Peak chose Sacramento after a competitive search around the country, and ended up bucking the conventional wisdom that you can’t build things in California anymore. Mossburg said he wanted to prioritize access to talent, rather than chase the richest state and local incentives or the lowest cost of labor or energy. Operating in California involves spending more in taxes and electricity costs than, say, in Texas, but Sacramento is accessible to the Bay Area and all the electrical engineering expertise of Silicon Valley and the Tesla diaspora. It’s also close to the Burlingame site where Peak has built its first enclosures.

Peak also won $10.5 million in tax credits from the California Competes program, which are tied to hiring milestones, Mossburg said.

Down the road, Peak leadership hopes to find onshore sources for its battery cells, and formed a partnership in June with GM to co-develop that product with the automaker’s Michigan battery labs.

All told, Peak’s strategy could allow for a relatively low-cost and rapid path to large-scale manufacturing. That would be a welcome contrast to the billion-dollar factory expansion pursued by Swedish startup Northvolt, which tried to forge a European battery empire before collapsing into bankruptcy. (Mossburg worked there for a time as president for North America.) But Peak still needs to prove there’s a market for a chemistry that has never been widely deployed in the U.S. grid storage market, which has been notoriously unwelcoming to anything that isn’t lithium-ion.

Peak’s chief strategy officer, Geoff Brown, got in early on the current LFP trend about a decade ago, when he was running pioneering grid-battery firm Powin Energy. His company scoured the Chinese market for the best cells to put into grid storage enclosures, and ultimately picked a form factor that had been designed for electric buses, he recalled. At that point, sodium-ion cells hadn’t made the jump to mass production.

Unlike the chemistries that ruled the grid storage market thus far, sodium-ion was ​“the first battery really purposely designed” for stationary storage, Brown said. 

“You sacrifice some energy density for massive improvements in safety but also very significant economic benefits,” he noted.

A vast global factory base now produces LFP cells, but sodium-ion is already within striking distance of the per-cell manufacturing cost given its cheaper bill of materials, Mossburg said. Peak is pricing its enclosures to match Tesla’s LFP-fueled Megapack, but argues that they cost less on a lifetime basis because the cells are so durable and don’t need energy-sucking temperature-control and fire-suppression equipment.

Still, scale matters, and the Sacramento site is a necessary step for taking on the U.S. storage market with this new battery.