Goldman Sachs: Data Center Energy Storage Becomes New Focus, Rivian R2 Deliveries Begin

Overview

This report provides Goldman Sachs' quick review of key news and events in the US Auto & Industrial Tech sector over the past week. Core content covers electric vehicle (EV) new product deliveries (e.g., Rivian R2), traditional automakers' latest layouts in batteries and energy (e.g., General Motors), regulatory and commercialization progress in autonomous driving technologies (e.g., Tesla, Volvo, Waymo), and industry-level production, sales, and pricing data. The report specifically emphasizes that the growing demand for energy storage and power from data centers is creating new market opportunities for traditional automotive supply chain companies.

Core views

Data Center Energy Storage Becomes a New Growth Point: With rising demand for battery storage and power from data centers, especially given the long grid connection and turbine delivery cycles, traditional internal combustion engine (ICE) and EV technologies are being adapted for this field. The report identifies BorgWarner (BWA) as a key beneficiary of this theme, while also seeing opportunities in STMicroelectronics (ST) and Aptiv (APTV). Consequently, Ford's (F) price target has been raised to reflect the value of its Battery Energy Storage System (BESS) business. Rivian R2 Deliveries Begin and Market Prospects: Rivian has commenced customer deliveries of the R2 model. Management emphasized that the R2 is designed to reduce bill of materials costs, simplify complexity, and improve manufacturability, while retaining brand essence. Its third-generation hardware platform, including the RAP1 chip, is expected to be equipped on the R2 by the end of 2026. The report considers the R2 an impressive model that will drive volume growth, noting that its potential market size in the US and Europe (at least 4 million units) is significantly larger than the R1's (approximately 1 million units). General Motors' Energy and Technology Updates: General Motors announced a partnership with Peak Energy to develop sodium-ion batteries for utility-scale energy storage, targeting commercialization in 2028, with costs potentially lower than Lithium Iron Phosphate (LFP). Additionally, GM will activate Vehicle-to-Grid (V2G) bidirectional charging capabilities for over 250,000 compatible EVs via software updates and introduce an 'Energy Pass' to optimize public charging experiences. Starting in 2027, all EVs will come standard with North American Charging Standard (NACS) ports. Media reports suggest GM may cancel future plans to use LFP batteries for EVs, focusing instead on Lithium-Rich Manganese-Based (LMR) technology, and redirecting planned LFP capacity at its Tennessee plant toward energy storage. Autonomous Driving and Mobility Service Progress: Tesla FSD (Supervised) received interim approval in Denmark and Belgium and applied for an Autonomous Vehicle Network Company license in Nevada. At Capital Markets Day, Volvo announced plans to launch driverless trucks in Q1 2027, operating over 300 autonomous trucks in the US Sun Belt region by Q4 2027, with industrial-scale operations expected in 2028, contributing approximately $3 billion in revenue within five years and improving operating margins. Waymo launched an invite-only 'Premier' subscription tier for $29.99 per month, offering priority pickup services. Stellantis launched an autonomous mobility pilot test project in Luxembourg. Industry Data and Market Performance: S&P Global Mobility lowered its 2026 global auto production forecast to 90.7 million units (down 2.6% year-over-year), mainly due to reduced production in China; 2027 is expected to grow by 1.0% to 91.6 million units. Early June retail sales in China fell 23% year-over-year, with NEV sales down 14%. The average new car price in the US was $51,649, up year-over-year, with inventory at approximately 2.91 million units, a slight increase year-over-year. On individual stocks, Amphenol and Belden performed well, while Innoviz and QuantumScape saw significant declines.

Analysis framework

The report adopts an 'event-driven + data verification' analytical framework. First, it quickly captures marginal changes across companies by reviewing specific events that occurred in the industry over the past week (such as product deliveries, policy approvals, and strategic partnerships). Second, it combines macro and high-frequency industry data (such as S&P Global's production forecasts, Chinese auto sales, and US car prices and inventory) to verify industry prosperity trends. Finally, based on technological evolution logic (such as the migration of EV technology to data center energy storage), it explores cross-sector investment opportunities that are not fully priced in, reflecting views through valuation analysis (e.g., raising Ford's price target).

Methodology notes

• Industry/Industrial Analysis FrameworkUpstream, Midstream, and Downstream Transmission in the Industry Chain

  Cross-Industry Technology Application and Demand Transmission

  The report points out that EV and traditional ICE technologies are being adapted for data center energy storage, demonstrating the transmission and application expansion of technology across different links in the industry chain, helping investors identify the growth logic of traditional auto parts manufacturers in new scenarios.

• Industry/Industrial Analysis FrameworkSupply and Demand Framework

  Global Auto Production and Regional Supply-Demand Balance

  By analyzing S&P Global's global production forecasts and production/sales data in regions such as China and the US, the report assesses adjustments in industry supply and changes in demand, thereby determining the overall trend of industry prosperity.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• BorgWarner (BWA)

  Benefiting from increased data center energy storage and power demand

  Strengths

  Traditional technologies adaptable for data center energy storage, key beneficiary

• Ford (F)

  Price target raised to reflect BESS business value

  Strengths

  Possesses Battery Energy Storage System business

• Rivian (RIVN)

  R2 deliveries begin, market space expands

  Strengths

  R2 model has low cost, strong manufacturability, and large potential market

• General Motors (GM)

  Battery technology updates and V2G layout

  Strengths

  Sodium-ion batteries, V2G bidirectional charging, NACS standard adaptation

• Tesla (TSLA)

  FSD receives interim approval in Europe and applies for Nevada license

  Strengths

  Smooth progress in autonomous driving regulation

  Risks

  Risk of EU final approval rejection

• Volvo

  Accelerated commercialization of autonomous trucks

  Strengths

  Clear mass production timeline and revenue expectations

Key data

• 2026 Global Auto Production Forecast90.7 million unitsDown 2.6% year-over-year, revised down from previous forecast
• 2027 Global Auto Production Forecast91.6 million unitsUp 1.0% year-over-year
• China Early June Retail Sales YoY-23%Year-to-date cumulative decline of 20%
• US New Car Average Price$51,649Up year-over-year, approximately $2,200 higher than March 2025
• US New Car Inventory2.91 million unitsIncrease of 24,000 units year-over-year
• Rivian R2 Potential Market SizeAt least 4 million unitsCovers the US and Europe, far exceeding the R1's 1 million units
• Volvo Autonomous Truck Revenue ExpectationApproximately $3 billionExpected to contribute within 5 years, scaling in 2028

Impact & implications

The report argues that the urgent demand for power and energy storage from data centers is reshaping the value proposition of some auto parts companies, extending them from pure automotive supply chains to broader energy infrastructure fields, which may bring valuation re-rating opportunities. The successful delivery and broad market potential of the Rivian R2 help alleviate market concerns about its reliance on a single model, supporting its long-term growth story. General Motors' adjustment in battery technology routes (shifting from LFP to LMR and sodium-ion) and its layout in the V2G field demonstrate its strategic deepening in the energy ecosystem, helping to enhance the competitiveness and added value of its EV business. Regulatory breakthroughs in the autonomous driving field (such as Tesla in Europe) and accelerated commercialization (such as Volvo, Waymo) indicate that the technology is gradually moving from testing to large-scale application, and relevant participants are expected to realize revenue contributions in the coming years.

Risks

• The EU may reject the FSD authorization proposal in the Netherlands, causing Tesla's approvals in Denmark and Belgium to become invalid
• Signs of consumer or market pressure may affect new car market stability
• Global auto production forecast downward revision, particularly weak performance in the Chinese market

What to watch

• Jabil will release earnings on June 17; focus on its performance and guidance
• Final approval results for Tesla FSD in the EU
• Progress in General Motors' research and development of sodium-ion batteries and LMR technology
• Market feedback and delivery ramp-up status for the Rivian R2