Hiding between two huge buildings on the Nevada Desert hills, the 805 retired EV battery is in neat formation, each wrapped in an unexplained white tarp, hidden by the outlook.
Passersby may not realize that this modest array is North America’s largest microgrid, powering the 2,000 GPU modular data center of AI infrastructure company Crusoe, or representing the next major act of JB Straubel, co-founder and CEO of Redwood Materials.
Redwood Materials announced Thursday at an event in Sparks, Nevada that it would launch an energy storage business that utilizes the thousands of EV batteries it collected to power businesses as part of its battery recycling business. It also starts with an AI data center.
A new business called Redwood Energy is kicking off alongside partner Crusoe, a startup Straubel invested in 2021. It stores energy generated from an old EVS, an adjacent solar array that is not yet ready for recycling. The system generates 12 MW of power and has a capacity of 63 MWH of power, which sends power to a modular data center built by Crusoe, best known on its large data center campus in Abilene, Texas.
The scale of Redwood’s battery collection operations is astounding and an opportunity. Redwood said it will recover more than 70% of battery packs used or discarded in North America. Today, it handles more than 20 GWh of batteries each year. This is equivalent to 250,000 EV.
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.
Straubel’s confidence in their efforts was evident in every detail of the launch event. To illustrate Redwood’s commitment, and thus, the Stroubel, music and projections on the big screen, all of the events were equipped with microgrids, from laser light shows containing giant Pac-Man Ghosts navigating the rows of EV batteries.
“We wanted to go all out,” Straubel said, breaking into a wide, teeth-like smile. Aside from the flashy effects of the event, microgrid setup using Crusoe is not a demonstration project. Straubel said it was a profitable operation, built in four months and was profitable. He added that 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. Over time, the company expanded beyond recycling to cathode production. Redwood generated $200 million in revenue in 2024, much of which comes from the sale of battery materials such as cathodes.
The company’s footprint is also growing, far beyond Carson City’s Nevada headquarters. It shuts out deals with Toyota, Panasonic and GM, and begins construction at its South Carolina plant and acquires it in Europe.
Redwood Energy is the next step, not tied to setting the system off-grid. Retired EV batteries can also be powered by wind and solar, or tied to the grid. For the Crusoe project, the system is equipped with solar.
“We don’t need green intent here,” CTO Colin Campbell said during a tour of Microgrid. “It’s a good economic choice that happens to be carbon-free.”
The business model addresses long-standing challenges in the energy storage sector. 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 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 at the Alliance of Scientists, told TechCrunch. She added that large recyclers like Redwood have recognized the potential profitability of reused EV batteries, “where is this end-of-life market going?”
Reusing batteries is a clear business opportunity for Redwood, but it may be a business necessity. 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.
“If Redwood doesn’t enter the reuse market, they won’t get a share from the reused batteries. They’ll 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.
The current state of the recycling market highlights challenges. “Currently, the recycling market is primarily manufacturing scrap, home appliances and EV batteries that have broken down under warranty,” Dan said. It was enough for Redwood to process more than 20 gigawatt hours each year. But it pales in comparison to today’s EVS 350 gigawatt hours, and is expected to hit the road every year at 150 gigawatt hours.
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.
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