Redwood Materials has repurposed used electric vehicle batteries to help meet data centers’ surging energy demand.
Redwood Materials has installed the largest energy-storage system ever built from repurposed electric vehicle batteries. Their breakthrough installation is a 12 MW, 63 MWh microgrid that powers a modular data center outside Reno, Nevada.
The best part? They already had the materials. While many startups have struggled to invent new batteries for renewable energy storage, Redwood took a different approach—reusing the batteries they were already collecting through their recycling program.
The company recovers end-of-life batteries and recycles their critical minerals. In the process, they’ve found that many used EV batteries still retain over 50 percent of their usable capacity, demonstrating an opportunity for second-life use.
Second-life batteries in a microgrid. Image used courtesy of Redwood Materials
Why Use Old Batteries?
Global electric vehicle sales are booming, with over 17 million EVs sold in 2024. As more EVs hit the road, more used batteries are reaching the end of their life in cars.
While many would assume that retired EV batteries are completely defunct, Redwood Materials sees an opportunity for these batteries to have a second life. Redwood is building a circular supply chain for EVs and clean energy products. With electricity demand growing alongside EV sales, Redwood repurposes these batteries into affordable, large-scale energy storage systems to help fill gaps in energy infrastructure without adding strain to the grid.
The batteries used in EVs are often retired while still retaining much of their original capacity, simply because cars require top performance. However, in stationary settings, like energy storage for solar power, that remaining capacity is more than enough. What’s no longer ideal for driving can still be highly effective for storing and supplying clean energy.
Recovering used EV batteries. Image used courtesy of Redwood Materials
Reusing these batteries is also more affordable than relying on newly manufactured ones, helping lower energy storage costs as renewable power expands. This reuse is an example of the circular economy: giving existing products a second life before eventually recycling their materials.
With over 100,000 EVs expected to be retired this year, Redwood estimates that used EV batteries could soon supply at least 50 percent of the global demand for energy storage, all without the need to build new batteries for renewables.
A Solution Right on Time
Located just outside Reno, Nevada, the microgrid installation powers a compact data center built by the startup Crusoe, an AI infrastructure company. The site combines the EV battery microgrid, the data center, and a solar array that charges the batteries. Any surplus energy generated flows directly to Redwood’s surrounding facilities, creating a self-sustaining, low-cost power ecosystem.
This innovative solution comes at a critical time. The rise of AI and widespread electrification is expected to double—or even triple—the energy demand of U.S. data centers within the next three years. A Department of Energy report states that data centers consumed around 4.4 percent of US electricity in 2023, around 176 TWh. Without new forms of energy storage and delivery, this surge could place serious strain on the grid.
Data center energy use is expected to eclipse other commercial buildings. Image used courtesy of Energy Information Administration
Redwood’s systems are flexible by design. They can operate independently or connect to the grid. This allows them to shave peak loads, boost energy resilience, and store power from intermittent sources like solar and wind. The result is reliable, low-cost energy for high-demand uses like data centers.
Scaling Up
While this is Redwood’s first successful full-scale installation, it will not be their last. The company currently has over a gigawatt-hour of renewable batteries slated for deployment, with an additional 5 GWh expected in the next year. Though this first project delivers 12 MW of capacity, Redwood is already designing projects that exceed 100 MW.
With access to most of North America’s reusable EV batteries, Redwood is positioned to help meet the soaring energy demands of the AI era while accelerating innovation and building a more resilient, sustainable energy future.
Redwood Materials was founded in 2017 by JB Straubel, co-founder and former Chief Technology Officer of Tesla.
