Tucked between two huge buildings within the hills of the Nevada desert, 805 retired EV batteries lie in neat formation, each wrapped in nondescript white tarps — and hiding in plain sight.
A passerby may not notice 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 following huge 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 offer energy to corporations. They usually’re beginning with AI knowledge facilities.
The brand new enterprise, known as Redwood Vitality, is kicking off with associate Crusoe, a startup Straubel invested in 2021. The outdated EVs, which aren’t but prepared for recycling, retailer vitality generated from an adjoining photo voltaic array.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 identified for its large-scale knowledge middle campus in Abilene, Texas — the preliminary website of the Stargate challenge.
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. Immediately, 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 turn out to be the biggest repurposer of used EV battery packs.
Straubel’s confidence within the endeavor was obvious in each element of the launch occasion. For example the dedication of Redwood — and by extension, Straubel — the whole lot on the occasion from the music and projection on the massive display to a laser mild present that included big Pac-Man ghosts navigating the rows of EV batteries have been powered by the microgrid.
“We wanted to go all in,” Straubel mentioned, breaking into a large, toothy smile. Splashy results for the occasion apart, the microgrid setup with Crusoe shouldn’t be an indication challenge. Straubel mentioned it is a revenue-generating operation, which was constructed in 4 months, and one that’s worthwhile. He added that much more of those will probably be deployed with different clients this 12 months.
“I think this has the potential to grow faster than the core recycling business,” he mentioned.
Redwood Supplies has been on an growth tear lately. The corporate, which has raised $2 billion in non-public 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 cellphone batteries and laptop computer computer systems. After processing these discarded items and extracting supplies like cobalt, nickel and lithium which might be usually 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 effectively past its Carson Metropolis, Nevada headquarters. It has locked up offers with Toyota, Panasonic, and GM, began development on a South Carolina manufacturing facility, and made an acquisition in Europe.
Redwood Vitality is the following step — and one which isn’t tied to establishing its programs to be off-grid. The retired EV batteries will be powered by wind and photo voltaic, or they are often tied to the grid. Within the case of the Crusoe challenge, the system is powered by photo voltaic.
“There’s no green intent required here,” CTO Colin Campbell mentioned throughout a tour of the microgrid. “It’s a good economic choice that also happens to be carbon-free.”
The enterprise mannequin addresses a longstanding problem within the vitality storage sector. For over a decade, corporations have been promising to construct grid-scale storage from used EV batteries, however they’ve solely materialized in small quantities. Redwood, which bought 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 really demonstrates how economical the waste hierarchy actually is,” Jessica Dunn, a battery knowledgeable on the Union of Involved Scientists, advised TechCrunch. That a big recycler like Redwood acknowledged the revenue potential in repurposed EV batteries exhibits “where this end-of-life market will go,” she added.
Repurposing batteries is a transparent enterprise alternative for Redwood, nevertheless it may also be a enterprise crucial. Redwood was based to construct a provide chain that might deal with the expected wave of used EV batteries that may hit the market. However that wave hasn’t materialized fairly as shortly 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 wait the five, 10, 15 years until they retired,” she mentioned. Within the meantime, different corporations would have the ability 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 started really early, and in a way we started Redwood almost too early,” he mentioned, noting the corporate initially was accumulating client batteries and manufacturing scrap forward of the approaching wave of EVs.
The present state of the recycling market underscores the problem. “Right now, the recycling market is mostly manufacturing scrap, consumer electronics, and EV batteries that have failed under warranty,” Dunn mentioned. That has been sufficient for Redwood to course of over 20 gigawatt-hours yearly. But it surely pales compared to the 350 gigawatt-hours in EVs at this time and the 150 gigawatt-hours anticipated to hit the highway yearly.
Redwood at present 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 essential minerals that the U.S. would like stayed inside its borders.
The corporate beforehand mentioned that it is going to be able to making 100 gigawatt-hours yearly of cathode energetic materials and anode foil by the top of this 12 months. By the top of the last decade, it expects manufacturing to hit 500 gigawatt-hours.
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