Nestled among two large structures in the Nevada wilderness, 805 decommissioned electric vehicle batteries are arranged neatly under unassuming white covers, effectively camouflaged in their surroundings.
Someone walking by wouldn’t know that this is the biggest microgrid in North America, nor would they be aware that it supplies power to a 2,000 GPU modular data center run by AI firm Crusoe. Additionally, they probably wouldn’t guess that it represents JB Straubel, co-founder and head of Redwood Materials, embarking on his latest significant project.
On Thursday, Redwood Materials held an event at their Sparks, Nevada location where they revealed plans to start an energy storage venture. This initiative aims to utilize the numerous electric vehicle batteries gathered through their battery recycling operations to supply eco-friendly power to businesses, beginning with artificial intelligence data centers.
Redwood Energy, the recently launched venture, will be partnering with Crusoe. These pre-owned electric vehicles (EVs), still unsuitable for recycling, hold onto energy derived from a nearby solar panel field. This setup feeds into a system capable of generating up to 12 MW of electricity with a storage capacity of 63 MWh. It then channels this power toward a modular data center developed by Crusoe—an artificial intelligence-focused firm renowned particularly for their extensive data center complex in Abilene, Texas, where they initiated the Stargate project.
Redwood said it recovers more than 70% of all used or discarded battery packs in North America. It has apparently been stockpiling batteries that aren’t ready for recycling, with more than 1 gigawatt-hour worth in its inventory already. In the coming months, it expects to receive another 4 gigawatt-hours.
The firm has stated that by 2028, they aim to implement 20 gigawatt-hours of grid-level energy storage, positioning them to potentially lead as the biggest user of recycled electric vehicle batteries for this purpose.
To demonstrate the dedication of Redwood—and by extension, Straubel—the company’s whole event, including the lighting, DJ setup, cuisine, and large screens, was fueled by the microgrid.
"We were determined to fully commit," Straubel remarked, his face lighting up with a broad grin. Beyond the flashy special effects for the occasion, the microgrid established with Crusoe isn’t just a test run. According to Straubel, this venture generates income and turns a profit. Additionally, many more such setups will be implemented for various clients before the end of the year.
"I believe this could expand more rapidly than the main recycling sector," he stated.
Redwood Materials has been rapidly expanding in recent years. The firm, having secured significant funding, continues to grow. $2 billion from private sources It was established in 2017 by Straubel, who previously served as Tesla's Chief Technology Officer and is now a board member, with the aim of establishing a circular supply chain.
The firm began by reclaiming waste material from battery cells used in devices such as mobile phones and laptops. Following this process of recovering components including cobalt, nickel, and lithium—which would otherwise require mining—the business provides these resources back to companies like Panasonic. However, Redwood’s operations have grown past just recycling; they now also manufacture cathodes. This expansion enabled Redwood to generate $200 million in revenue In 2024, much of this stems from selling battery components such as cathodes.
Its reach has expanded significantly as well, extending far beyond its base in Carson City, Nevada. The company secured agreements with Toyota, Panasonic, and GM, and also commenced construction on new projects. South Carolina factory , and made an acquisition in Europe.
The next phase for Redwood Energy does not involve confining itself to standalone, off-grid setups. These repurposed electric vehicle batteries can utilize power from wind and solar sources or connect to the main electrical grid as needed. For instance, with the Crusoe initiative, they rely solely on solar energy.
There isn’t a necessity for eco-friendly intentions here," stated CTO Colin Campbell during a tour of the microgrid. "This is simply a sound financial decision that coincidentally doesn’t produce carbon emissions.
Over ten years, businesses have pledged to construct large-scale storage systems using recycled electric vehicle batteries, yet these efforts have resulted in minimal outcomes. Starting off as a firm focused on battery materials and recycling, Redwood is now launching a fresh venture aimed at providing vast quantities of essential energy storage within merely a couple of years, measured in gigawatts.
This truly highlights the economic efficiency of the waste hierarchy," said Jessica Dunn, a battery specialist from the Union of Concerned Scientists, during an interview with TechCrunch. She further noted that when major recyclers such as Redwood acknowledge the financial benefits of repurposed electric vehicle batteries, it indicates "the direction this end-of-life market will take.
Redwood was established with the aim of developing a supply chain capable of managing the anticipated influx of used electric vehicle batteries entering the market. However, this surge has not occurred at the pace many had expected.
Reusing batteries presents a definite business chance for Redwood, yet it could also become a necessary move for their business survival.
If Redwood doesn't join the repurposing industry, they won't earn any portion of the profits from these recycled batteries," she explained. Instead, they'd have to wait possibly five, ten, or even fifteen years before retirement. During this period, competitors could capitalize on selling the batteries for large-scale energy storage, which would exclude Redwood from several years' worth of income.
Straubel recognized this, stating in an interview that in numerous aspects, Redwood Materials began a little prematurely.
"We began quite early, perhaps even before our time with Redwood," he mentioned, highlighting that the company first gathered consumer batteries and production waste in anticipation of the upcoming electric vehicle boom.
Currently, the recycling market primarily focuses on processing scrap from manufacturing, used consumer electronics, and electric vehicle batteries that have failed during their warranty period," Dunn explained. This volume of materials has enabled Redwood to handle more than 20 gigawatt-hours each year; however, this amount is significantly lower when compared to the current 350 gigawatt-hours of EVs on the roads today and the anticipated additional 150 gigawatt-hours set to enter circulation yearly.
Redwood already operates a recycling plant on its 175-acre site in Sparks, Nevada, and it is working on expanding this operation. 600-acre facility In Charleston, South Carolina, the facility will remanufacture cathode and anode copper foil. Both products include critical minerals that the U.S. administration prefers to keep domestically.
Earlier, the firm stated that it would produce up to 100 gigawatt-hours per year of cathode active material and anode foil by the close of this year. It anticipates that its output will reach approximately 500 gigawatt-hours by the end of the current decade.