Redwood Materials, the battery recycling and materials company founded by former Tesla CTO JB Straubel, has officially launched Redwood Energy, a new business unit dedicated to repurposing second-life electric vehicle (EV) batteries for grid-scale energy storage applications. This strategic expansion marks a significant step towards establishing a circular economy for lithium-ion batteries and addressing the escalating energy demands of critical infrastructure.

The inaugural deployment for Redwood Energy is a groundbreaking 12-megawatt (MW) / 63-megawatt-hour (MWh) microgrid, developed in partnership with Crusoe, a vertically-integrated AI infrastructure provider. This project, which powers an AI data center, represents the largest deployment of second-life batteries globally and the largest microgrid of its kind in North America. Crusoe's data center campuses, including a 1.2-gigawatt site in Abilene, Texas, underscore the immense and growing energy requirements of advanced computing, which the U.S. Department of Energy projects could consume 12% of U.S. electricity by 2028. Integrating large-scale battery energy storage systems (BESS) is crucial for mitigating grid strain posed by such energy-intensive operations.

Redwood Materials currently processes over 20 gigawatt-hours (GWh) of batteries annually, accounting for approximately 90% of all lithium-ion batteries and battery materials recycled in North America. The company estimates that many of these batteries retain over 50% of their original usable capacity, making them ideal for less demanding, stationary energy storage applications. With over 5 million EVs active on U.S. roads, representing an estimated 350 GWh of energy that will reach end-of-life in the coming years, Redwood projects that second-life EV batteries could supply 50% or more of the entire energy storage market when combined with commercial fleet returns. The firm reports a deployment pipeline exceeding one gigawatt-hour of reusable batteries, with projects already being designed at 100MW+ scale.

The concept of repurposing EV batteries for energy storage is gaining traction across the industry. UK-based Connected Energy, for instance, recently partnered with Forsee Power to develop grid-scale ESS using electric bus batteries. Similarly, a 10MWh BESS for Aeroporti di Roma’s Fiumicino Airport will integrate second-life EV batteries from Mercedes-Benz, Nissan, and Stellantis. Enel, Nissan, and Loccioni have also collaborated on successful projects, including a 4MW/1.7MWh backup power system in Melilla, Spain, which became operational in 2022. These initiatives collectively demonstrate the viability and growing adoption of second-life battery solutions as a sustainable and cost-effective alternative to new battery manufacturing for stationary storage.