Redwood Materials launches energy storage business and its first target is AI data centers

Nestled between two massive buildings in the hills of the Nevada desert, 805 Retirement EV batteries are in neat formation, each wrapped in indescribed white tarpaulins – and hiding in view.

A passer-by may not realize that this unpretentious table is the largest microorèseau in North America, that it feeds a modular center of 2,000 GPU for the infrastructure company of IA Crusoe, or that it represents the next major act of JB Straubel, the co-founder and CEO of Redwood Materials.

Redwood Materials announced Thursday during an event in its Sparks facilities, in Nevada, that it launched an energy storage company which will take advantage of the thousands of EV batteries which it collected within the framework of its battery recycling company to provide companies to companies, starting with the AI ​​data centers.

The new company, called Redwood Energy, starts with the Crusoe partner, a Startup Straubel invested in 2021. The old electric vehicles, which are not yet ready for recycling, the energy stores generated from an adjacent solar network. The system, which generates 12 MW of power and has 63 MWh of capacity, sends the power to a modular data center built by Crusoe, the IA infrastructure company better known for its large -scale data center campus in Abilene, Texas – the initial site of the Stargate project.

The magnitude of the Redwood battery collection operation is amazing. Redwood said it recovers more than 70% of all battery packs used or thrown in North America. Today, it treats more than 20 GWh of batteries per year – the equivalent of 250,000 electric vehicles. He apparently stored batteries that are not ready to be recycled, with more than 1 Gigawatt-hour in his inventory already. In the coming months, he plans to receive 4 other gigawatt hours.

By 2028, the company said that it planned to deploy 20 gigawattheures of storage on a grid scale, placing it on the right track to become the largest EV USE batteries reuse.

Straubel’s confidence in the effort was apparent in every detail of the launch event. To illustrate Redwood’s engagement – and by extension, Straubel – all on production, lights and music on the large screen was powered by the microrasseau.

“We wanted to go to everyone,” said Straubel, having a large smile at point. The splashing effects for the event apart, the configuration of the microreseau with Crusoe is not a demonstration project. Straubel said it was an income -generating operation, which was built in four months, and one that is profitable. He added that even more of them will be deployed with other customers this year.

“I think it has the potential to grow faster than the basic recycling company,” he said.

The Redwood Materials has been on an expansion tear in recent years. The company, which has raised $ 2 billion in private fundswas founded in 2017 by Straubel, the former Tesla CTO and current member of the Board of Directors, to create a circular supply chain.

The company began by recycling the scrap of battery cell production as well as consumer electronics such as mobile phones and laptops. After having treated these products thrown and extracts materials such as cobalt, nickel and lithium which are generally extracted, sequoia provides them in Panasonic and other customers. Over time, the company has extended beyond recycling and the production of cathode. The sequoia generated 200 million dollars in income In 2024, a large part of which comes from the sale of battery materials like cathodes.

The company’s imprint has also developed, and far beyond its head office in Carson City, in Nevada. He locked the agreements with Toyota, Panasonic and GM, started construction on a South Carolina factoryAnd makes an acquisition in Europe.

Redwood Energy is the next step – which is not linked to the implementation of its systems to be out of network. Retired EV batteries can be powered by wind and solar energy, or they can be attached to the grid. In the case of the Crusoe project, the system is powered by solar energy.

“No green intention is required here,” said CTO Colin Campbell during a visit to the microreseau. “It is a good economic choice which is also carbon -free.”

The business model takes up a long -standing challenge in the energy storage sector. For more than a decade, companies have promised to build a grid -scale storage from used electric batteries, but they have only materialized in small quantities. Redwood, who made his debut as a materials and battery recycling company, creates a new line that promises to deliver essential energy storage gigawatts in a few years.

“It really shows how economical the waste hierarchy is,” a Union of Conc. Contés, Techcrunch’s battery expert in Techcrunch. That a big recycler like Redwood recognized the profit potential in reused EV batteries shows “where this end-of-life market will go,” she added.

The reuse of batteries is a clear commercial opportunity for redwoods, but it could also be a commercial imperative. Redwood has been founded to build a supply chain that could manage the expected wave of used EV batteries that will arrive on the market. But this wave did not materialize as quickly as some provided.

“If Redwood has not entered the reuse market, then they would not get by the reused battery. They should wait for five, 10, 15 years until their retirement,” she said. In the meantime, other companies could sell the batteries for network level storage, reducing the redid of years of income.

Straubel recognized it, noting in an interview that, in many ways, Redwood materials started a little early.

“We started very early and, in a way, we started the redwood almost too early,” he said, noting that the company initially collected consumption batteries and the production piece before the next wave of electric vehicles.

The current state of the recycling market highlights the challenge. “Currently, the recycling market mainly manufactures pieces of scrap, consumer electronics and EV batteries that have failed under warranty,” said Dunn. This was sufficient for redwood to treat more than 20 gigawattheures per year. But it turns out compared to the 350 gigawathours in electric vehicles today and the 150 gigawathours which should hit the road each year.

Redwood currently has a recycling installation in its 175 acres campus in Sparks, Nevada, and it develops a Installation of 600 acres in Charleston, in South Carolina. The latter will cank the cathode and the anode copper sheet, which both contain critical minerals that the United States would prefer to remain inside its borders.

The company previously declared that it would be able to make 100 gigawattheures per year of active cathodic and anode materials by the end of this year. At the end of the decade, it expects production to reach 500 gigawattheures.