Tucked between two massive buildings in the hills of the Nevada desert, 805 retired EV batteries lie in neat formation, each one wrapped in nondescript white tarps \u2014 and hiding in plain sight.\u00a0<\/p>\n
A passerby might not realize this unassuming array is the largest microgrid in North America, that it\u2019s powering a 2,000 GPU modular data center for AI infrastructure company Crusoe, or that it represents the next big act of JB Straubel, the co-founder and CEO of Redwood Materials.\u00a0<\/p>\n
Redwood Materials announced Thursday during an event at its Sparks, Nevada facility that it was launching an energy storage business that will leverage the thousands of EV batteries it has collected as part of its battery recycling business to provide power to companies, starting with AI data centers.<\/p>\n
The new business, called Redwood Energy, is kicking off with partner Crusoe, a startup Straubel invested in 2021. The old EVs, which are not yet ready for recycling, store energy generated from an adjacent solar array. The system, which generates 12 MW of power and has 63 MWh of capacity, sends power to a modular data center built by Crusoe, the AI infrastructure company best known for its large-scale data center campus in Abilene, Texas \u2014 the initial site of the Stargate project.\u00a0<\/p>\n The scale of Redwood\u2019s battery collection operation is staggering. Redwood said it recovers more than 70% of all used or discarded battery packs in North America. Today, it processes more than 20 GWh of batteries annually\u2014the equivalent of 250,000 EVs. It has apparently been stockpiling batteries that aren\u2019t ready for recycling, with more than 1 gigawatt-hour worth in its inventory already. In the coming months, it expects to receive another 4 gigawatt-hours.<\/p>\n By 2028, the company said it plans to deploy 20 gigawatt-hours of grid-scale storage, placing it on track to become the largest repurposer of used EV battery packs. <\/p>\n Straubel\u2019s confidence in the endeavor was apparent in every detail of the launch event. To illustrate the commitment of Redwood \u2014 and by extension, Straubel \u2014 everything about the production, from the lights and music to the projection on the big screen were powered by the microgrid.<\/p>\n \u201cWe wanted to go all in,\u201d Straubel said, breaking into a wide, toothy smile. Splashy effects for the event aside, the microgrid setup with Crusoe is not a demonstration project.\u00a0Straubel said this is a revenue-generating operation, which was constructed in four months, and one that is profitable.\u00a0He added that even more of these will be deployed with other customers this year.<\/p>\n \u201cI think this has the potential to grow faster than the core recycling business,\u201d he said.<\/p>\n Redwood Materials has been on an expansion tear in recent years. The company, which has raised $2 billion in private funds<\/a>, was founded in 2017 by Straubel, the former Tesla CTO and current board member, to create a circular supply chain.<\/p>\n The company started by recycling scrap from battery cell production as well as consumer electronics like cell phone batteries and laptop computers. After processing these discarded goods and extracting materials like cobalt, nickel and lithium that are typically mined, Redwood supplies those back to Panasonic and other customers. Over time, the company has expanded beyond recycling and into cathode production. Redwood generated $200 million in revenue<\/a> in 2024, much of which comes from the sale of battery materials like cathodes.<\/p>\n The company\u2019s footprint has grown too, and well beyond its Carson City, Nevada headquarters. It has locked up deals with\u00a0Toyota, Panasonic, and GM, started construction on a South Carolina factory<\/a>, and\u00a0made an acquisition<\/a>\u00a0in Europe.<\/p>\n Redwood Energy is the next step \u2014 and one that isn\u2019t tied to setting up its systems to be off-grid. The retired EV batteries can be powered by wind and solar, or they can be tied to the grid. In the case of the Crusoe project, the system is powered by solar.<\/p>\n \u201cThere\u2019s no green intent required here,\u201d CTO Colin Campbell said during a tour of the microgrid. \u201cIt\u2019s a good economic choice that also happens to be carbon-free.\u201d<\/p>\n The business model addresses a longstanding challenge in the energy storage sector. For over a decade, companies have been promising to build grid-scale storage from used EV batteries, but they\u2019ve only materialized in small amounts. Redwood, which got its start as a battery materials and recycling company, is creating a new line that promises to deliver gigawatts of much needed energy storage in just a few years.<\/p>\n \u201cThis really demonstrates how economical the waste hierarchy actually is,\u201d Jessica Dunn, a battery expert at the Union of Concerned Scientists, told TechCrunch. That a large recycler like Redwood recognized the profit potential in repurposed EV batteries shows \u201cwhere this end-of-life market will go,\u201d she added.<\/p>\n Repurposing batteries is a clear business opportunity for Redwood, but it might also be a business imperative.\u00a0Redwood was founded to build a supply chain that could handle the predicted wave of used EV batteries that will hit the market. But that wave hasn\u2019t materialized quite as quickly as some predicted.<\/p>\n \u201cIf Redwood didn\u2019t enter the repurposing market, then they wouldn\u2019t get a share from the repurposed battery. They\u2019d have to wait the five, 10, 15 years until they retired,\u201d she said. In the meantime, other companies would be able to sell the batteries for grid-scale storage, cutting Redwood out of years of revenue.<\/p>\n Straubel acknowledged this, noting in an interview that in many ways Redwood Materials started a bit early.\u00a0<\/p>\n \u201cWe started really early, and in a way we started Redwood almost too early,\u201d he said, noting the company initially was collecting consumer batteries and production scrap ahead of the coming wave of EVs.<\/p>\n The current state of the recycling market underscores the challenge. \u201cRight now, the recycling market is mostly manufacturing scrap, consumer electronics, and EV batteries that have failed under warranty,\u201d Dunn said. That has been enough for Redwood to process over 20 gigawatt-hours annually. But it pales in comparison to the 350 gigawatt-hours in EVs today and the 150 gigawatt-hours expected to hit the road every year.<\/p>\n Redwood currently has a recycling facility at its 175-acre campus in Sparks, Nevada, and it\u2019s developing a 600-acre facility<\/a> in Charleston, South Carolina. The latter will remanufacture cathode and anode copper foil, both of which contain critical minerals that the U.S. would prefer stayed within its borders.<\/p>\n The company previously said that it will be capable of making 100 gigawatt-hours annually of cathode active material and anode foil by the end of this year. By the end of the decade, it expects production to hit 500 gigawatt-hours.<\/p>\n<\/div>\n![\"\"](\"https:\/\/techcrunch.com\/wp-content\/uploads\/2025\/06\/Battery_Packs_2.jpg?w=680\")
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