Redwood Supplies launches vitality storage enterprise and its first goal is AI knowledge facilities

Tucked between two large buildings within the hills of the Nevada desert, 805 retired EV batteries lie in neat formation, every one wrapped in nondescript white tarps — and hiding in plain sight. 

A passerby won’t understand this unassuming array is the biggest microgrid in North America, that it’s powering a 2,000 GPU modular knowledge middle for AI infrastructure firm Crusoe, or that it represents the subsequent massive act of JB Straubel, the co-founder and CEO of Redwood Supplies. 

Redwood Supplies introduced Thursday throughout an occasion at its Sparks, Nevada facility that it was launching an vitality storage enterprise that may leverage the hundreds of EV batteries it has collected as a part of its battery recycling enterprise to supply energy to firms. They usually’re beginning with AI knowledge facilities.

The brand new enterprise, referred to as Redwood Vitality, is kicking off with associate Crusoe, a startup Straubel invested in 2021. The previous EVs, which aren’t but prepared for recycling, retailer vitality generated from an adjoining photo voltaic array. The system, which generates 12 MW of energy and has 63 MWh of capability, sends energy to a modular knowledge middle constructed by Crusoe, an organization greatest recognized for its large-scale knowledge middle campus in Abilene, Texas — the preliminary website of the Stargate venture. 

The size of Redwood’s battery assortment operation is staggering — and a chance. Redwood mentioned it recovers greater than 70% of all used or discarded battery packs in North America. As we speak, it processes greater than 20 GWh of batteries yearly — the equal of 250,000 EVs.

It has apparently been stockpiling batteries that aren’t prepared for recycling, with greater than 1 gigawatt-hour value in its stock already. Within the coming months, it expects to obtain one other 4 gigawatt-hours.

By 2028, the corporate mentioned it plans to deploy 20 gigawatt-hours of grid-scale storage, inserting it on observe to develop into the biggest repurposer of used EV battery packs.

Straubel’s confidence within the endeavor was obvious in each element of the launch occasion. As an instance the dedication of Redwood — and by extension, Straubel — all the things on the occasion from the music and projection on the large display screen to a laser mild present that included big Pac-Man ghosts navigating the rows of EV batteries have been powered by the microgrid.

“We wished to go all in,” Straubel mentioned, breaking into a large, toothy smile. Splashy results for the occasion apart, the microgrid setup with Crusoe is just not an indication venture. Straubel mentioned this can be a revenue-generating operation, which was constructed in 4 months, and one that’s worthwhile. He added that much more of those can be deployed with different clients this yr.

“I feel this has the potential to develop quicker than the core recycling enterprise,” he mentioned.

Redwood Supplies has been on an growth tear lately. The corporate, which has raised $2 billion in personal funds, was based in 2017 by Straubel, the previous Tesla CTO and present board member, to create a round provide chain.

The corporate began by recycling scrap from battery cell manufacturing in addition to client electronics like cellular phone batteries and laptop computer computer systems. After processing these discarded items and extracting supplies like cobalt, nickel and lithium which are sometimes mined, Redwood provides these again to Panasonic and different clients. Over time, the corporate has expanded past recycling and into cathode manufacturing. Redwood generated $200 million in income in 2024, a lot of which comes from the sale of battery supplies like cathodes.

The corporate’s footprint has grown too, and properly past its Carson Metropolis, Nevada headquarters. It has locked up offers with Toyota, Panasonic, and GM, began building on a South Carolina manufacturing facility, and made an acquisition in Europe.

Redwood Vitality is the subsequent step — and one which isn’t tied to organising its methods to be off-grid. The retired EV batteries may be powered by wind and photo voltaic, or they are often tied to the grid. Within the case of the Crusoe venture, the system is powered by photo voltaic.

“There’s no inexperienced intent required right here,” CTO Colin Campbell mentioned throughout a tour of the microgrid. “It’s a very good financial alternative that additionally occurs to be carbon-free.”

The enterprise mannequin addresses a longstanding problem within the vitality storage sector. For over a decade, firms have been promising to construct grid-scale storage from used EV batteries, however they’ve solely materialized in small quantities. Redwood, which received its begin as a battery supplies and recycling firm, is creating a brand new line that guarantees to ship gigawatts of a lot wanted vitality storage in just some years.

“This actually demonstrates how economical the waste hierarchy truly is,” Jessica Dunn, a battery professional on the Union of Involved Scientists, advised TechCrunch. That a big recycler like Redwood acknowledged the revenue potential in repurposed EV batteries exhibits “the place this end-of-life market will go,” she added.

Repurposing batteries is a transparent enterprise alternative for Redwood, but it surely may additionally be a enterprise crucial. Redwood was based to construct a provide chain that would deal with the expected wave of used EV batteries that may hit the market. However that wave hasn’t materialized fairly as rapidly as some predicted.

“If Redwood didn’t enter the repurposing market, then they wouldn’t get a share from the repurposed battery. They’d have to attend the 5, 10, 15 years till they retired,” she mentioned. Within the meantime, different firms would be capable to promote the batteries for grid-scale storage, chopping Redwood out of years of income.

Straubel acknowledged this, noting in an interview that in some ways Redwood Supplies began a bit early. 

“We began actually early, and in a means we began Redwood virtually too early,” he mentioned, noting the corporate initially was amassing client batteries and manufacturing scrap forward of the approaching wave of EVs.

The present state of the recycling market underscores the problem. “Proper now, the recycling market is usually manufacturing scrap, client electronics, and EV batteries which have failed beneath guarantee,” Dunn mentioned. That has been sufficient for Redwood to course of over 20 gigawatt-hours yearly. Nevertheless it pales compared to the 350 gigawatt-hours in EVs right now and the 150 gigawatt-hours anticipated to hit the street yearly.

Redwood at the moment has a recycling facility at its 175-acre campus in Sparks, Nevada, and it’s creating a 600-acre facility in Charleston, South Carolina. The latter will remanufacture cathode and anode copper foil, each of which include crucial minerals that the U.S. would favor stayed inside its borders.

The corporate beforehand mentioned that will probably be able to making 100 gigawatt-hours yearly of cathode lively materials and anode foil by the top of this yr. By the top of the last decade, it expects manufacturing to hit 500 gigawatt-hours.