Redwood Materials enters energy storage repurposing EV batteries for AI data centers

06/27/2025 Energy

Alright, buckle up, because Redwood Materials, spearheaded by Tesla's co-founder JB Straubel, is making some serious waves. I'm talking about diving headfirst into the energy storage game.

Remember those old EV batteries? Well, Redwood is giving them a second life. They're not just recycling them (though they're doing a stellar job at that, recovering over 70% of used batteries in North America!). Instead, they are repurposing them in a big way. I mean, imagine a field of retired EV batteries powering massive AI data centers. Sounds like something out of a sci-fi movie, right?

Their new division, Redwood Energy, is already up and running with a project alongside Crusoe, which focuses on providing power to a 2,000 GPU modular data center for AI infrastructure. I think it's a smart move to tackle the energy demands of AI, especially with the boom in AI development we're seeing.

This isn't some small-scale experiment either. We are talking about a system capable of generating 12 MW of power with a 63 MWh capacity. It's powered by solar energy and those very EV batteries that aren't quite ready for recycling just yet. The scale of Redwood's operation is impressive. They've got a gigawatt-hour worth of batteries in stock and expect to add another four gigawatt-hours soon.

Straubel is clearly confident, and he believes this new venture could outpace even their core recycling business. Redwood isn't new to expansion. Since its founding in 2017, the company has been steadily growing, securing deals with major players like Toyota, Panasonic, and GM. They're not just in Nevada anymore either, they're building factories and making acquisitions in Europe. To illustrate Redwood's commitment, everything at the launch event was powered by the microgrid!

The cool thing about Redwood Energy is that it's not just about being "green." While it's powered by solar in the Crusoe project, the system can also be tied to the grid or powered by wind. It's an economically sound choice that *also* happens to be good for the environment.

Redwood's move into repurposing isn't just smart business, it might be essential for the company's long-term success. Straubel acknowledges that they might have started Redwood Materials a bit early, before the wave of EV battery retirements really hit. By getting into repurposing, they ensure they're not left waiting on the sidelines while others profit from used batteries.

Even though the recycling market currently relies on manufacturing scrap, consumer electronics, and warranty failures, it's clear that the future is in EV batteries. With facilities already in Nevada and a massive one under development in South Carolina, Redwood is positioning itself to be a major player in the battery supply chain for years to come. Redwood is planning to produce 100 gigawatt-hours of cathode active material and anode foil this year, and 500 gigawatt-hours by the end of the decade.