Tucked away amidst the towering structures of the Nevada desert hills sit 805 retired EV batteries, neatly arranged and disguised under white tarps. Unbeknownst to passersby, this seemingly inconspicuous collection is actually the largest microgrid in North America, powering a cutting-edge 2,000 GPU modular data center for AI infrastructure firm Crusoe. This innovative project marks the latest venture of JB Straubel, the visionary co-founder and CEO of Redwood Materials.
Redwood Materials made a groundbreaking announcement at its Sparks, Nevada facility, unveiling a new energy storage business that capitalizes on the thousands of EV batteries it has amassed through its battery recycling operations. This initiative, known as Redwood Energy, has partnered with Crusoe, a startup backed by Straubel, to repurpose retired EVs that are not yet ready for recycling. These batteries store energy generated by an adjacent solar array, providing power to Crusoe’s modular data center in Texas.
The scope of Redwood’s battery collection efforts is truly impressive, with the company recovering over 70% of all discarded battery packs in North America. Currently processing more than 20 GWh of batteries annually, equivalent to 250,000 EVs, Redwood has stockpiled over 1 gigawatt-hour of batteries awaiting recycling, with an additional 4 gigawatt-hours expected soon. By 2028, the company aims to deploy 20 gigawatt-hours of grid-scale storage, positioning itself as a leader in repurposing used EV battery packs.
Straubel’s unwavering confidence in this venture was evident during the launch event, where every aspect, down to the lighting and sound, was powered by the microgrid. Emphasizing the operational profitability of the endeavor, Straubel highlighted that the microgrid with Crusoe is not merely a showcase but a revenue-generating enterprise that was operational within four months. With plans to expand this model to serve more clients in the near future, Straubel envisions rapid growth for Redwood Energy.
Established in 2017 by Straubel, Redwood Materials has rapidly evolved into a key player in the sustainable supply chain sector, raising $2 billion in private funding along the way. Initially focused on recycling scrap from battery cell production and consumer electronics, the company now supplies critical materials back to industry giants like Panasonic, Toyota, and GM, while also venturing into cathode production. With a revenue of $200 million in 2024, Redwood continues to expand its operations across the US and Europe.
Redwood Energy represents a strategic progression for the company, offering a scalable solution for repurposing retired EV batteries. Unconstrained by off-grid limitations, these batteries can be powered by renewable sources like solar or integrated into existing grids. By leveraging its extensive battery recycling expertise, Redwood aims to address the long-standing challenge of creating grid-scale storage solutions from used EV batteries, promising gigawatts of energy storage capacity in the near future.
The move towards repurposing batteries not only presents a lucrative opportunity for Redwood but also aligns with the imperative of managing the anticipated influx of retired EV batteries in the market. Recognizing the potential revenue loss from not participating in the repurposing market, Straubel underscores the importance of Redwood’s early entry into this space, anticipating the industry’s evolution towards a circular economy model.
As Redwood continues to expand its recycling capabilities in Nevada and South Carolina, the company is on track to become a major player in the production of cathode materials and anode foils, essential components in battery manufacturing. With ambitious production targets set for the coming years, Redwood is poised to lead the way in sustainable battery production and energy storage solutions.
