Hidden between two huge buildings on the Nevada Desert Hills, the 805 retired EV battery is in neat formation, each wrapped in an unexplained white waterproofing agent, hidden by its appearance.
Passersby may not realize that it is the largest microgrid in North America, that it powers AI infrastructure company Crusoe’s 2,000 GPU modular data center, or that it is the co-founder of Redwood Materials and the next Big Act for JB Straubel.
Redwood Materials launched an energy storage business that was announced at an event in Sparks, Nevada on Thursday, leveraging thousands of EV batteries collected as part of its battery recycling business to provide clean power from AI data centers.
A new business called Redwood Energy is kicking off with partner Crusoe. Older EVs that are not yet ready to be recycled will store the energy generated from adjacent solar arrays. From here, the system, which generates 12 MW of power and has a capacity of 63 MWH, will send power to a module data center built by Crusoe, the first site of the Stargate project, by the AI infrastructure company, the most well-known on its large data center campus in Abilene, Texas.
Redwood said it will recover more than 70% of battery packs used or discarded in North America. It clearly stocks up batteries that are not ready to be recycled, and stock is already worth 1 gigawatt hour. It is expected that in the coming months, we will receive an additional 4 gigawatt hours.
By 2028, the company said it plans to deploy 20 Gigawatts of grid-scale storage and get back on track to become the biggest reuser of used EV battery packs.
To illustrate Redwood’s commitment and, by extension, the entire company’s event from Straubel-Light and DJ to food and big screens was equipped with microgrids.
“We wanted to go all out,” Straubel said, breaking into a broad, teeth-like smile. Aside from the flashy effects of the event, the microgrids set up in Crusoe are not a demonstration project. Straubel said it is a profitable operation and profitable. And more of these will be rolled out with other customers this year.
“I think this could grow faster than the core recycling business,” he said.
Redwood materials have been expanding in recent years. The company, which raised $2 billion from a private fund, was founded in 2017 by former Tesla CTO and current board member Straubel, creating a circular supply chain.
The company began recycling scrap from battery cell production and with home electronics such as cell phone batteries and laptop computers. After treating these discarded goods and extracting materials such as cobalt, nickel and lithium, which are normally mined, Redwood supplies them to Panasonic and other customers. However, the company has expanded beyond recycling to cathode production. Redwood generated $200 million in revenue in 2024. Many of these come from the sale of battery materials such as cathodes.
The footprint is also growing, shutting out deals with Toyota, Panasonic and GM, starting construction at its South Carolina plant and acquiring it in Europe, making it well beyond its headquarters in Carson City and Nevada.
Redwood Energy is the next step, not tied to setting up the system to get off the grid. Retired EV batteries can also be powered by wind and solar, or tied to the grid. For Crusoe projects, it is equipped with solar.
“We don’t need green intent here,” CTO Colin Campbell said during a tour of Microgrid. “It just happens to be a carbon-free economic choice.”
For over a decade, businesses have been committed to building grid-scale storage from used EV batteries, but only small quantities have been achieved. Starting as a battery material and recycling company, Redwood is creating a new line of business that promises to provide much-needed gigawatts of energy storage in just a few years.
“This really shows just how economical the waste layer is,” Jessica Dunn, a battery expert with the Alliance of Concern Scientists, told TechCrunch. She added that large recyclers like Redwood have realized the potential profitability of Replized EV batteries, “where is this end-of-life market going?”
Redwood was founded to create a supply chain that could handle the predicted waves of used EV batteries that are hitting the market. But the waves aren’t happening as quickly as some people would expect.
Reusing batteries is a clear business opportunity for Redwood, but it may be a business necessity.
“If Redwood doesn’t enter the reuse market, they won’t get a share from reused batteries. They will have to wait five, 10, 15 years before they retire,” she said. In the meantime, other companies can sell batteries for grid-scale storage, reducing redwood from years of revenue.
Straubel admitted this and noted in his interview that in many respects Redwood material started a little earlier.
“We started really early, but in a way we started Redwood,” he said. The company initially said it had collected consumer batteries and production scrap ahead of the EV wave.
“Currently, the recycling market is primarily manufacturing scrap, home appliances and EV batteries that have broken down under warranty,” Dan said. Redwood was enough to process over 20 gigawatt hours a year, but it pales in comparison to today’s EVS 350 gigawatt hours and is expected to hit the road every year.
Redwood currently has recycling facilities on its 175-acre campus in Sparks, Nevada, and is developing a 600-acre facility in Charleston, South Carolina. The latter re-manufactures the copper foils for the cathode and anode.
The company previously said that cathode active materials and anode foil can be produced 100 gigawatts per hour by the end of this year. By the end of the decade, production is expected to reach 500 gigawatt hours.
