Redwood Materials, a leader in electric vehicle (EV) battery recycling, is giving retired EV batteries a second life by converting them into cost-effective microgrids, the company announced on Thursday. By repurposing still-functional batteries, Redwood’s new division, Redwood Energy, is creating modular energy storage systems that address critical energy grid gaps at a fraction of the cost of new projects, according to The Verge.

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Repurposing EV Batteries for a Sustainable Future

Redwood processes over 20 gigawatt-hours of batteries annually—equivalent to 250,000 EVs—representing about 90% of North America’s recycled lithium-ion batteries. Many of these batteries, though unsuitable for EVs, retain up to 50% of their energy capacity. Instead of recycling them, Redwood’s engineers run diagnostics to identify reusable packs, which are then integrated into flexible, modular storage systems. These systems can operate independently or connect to the grid, offering a sustainable solution as more EVs retire. The company estimates over 100,000 EVs will exit roads in 2025, with reusable battery capacity growing by 5 gigawatt-hours next year.

Redwood Materials Transforms Old Ev Batteries Into Affordable Microgrids For Energy Storage

First Major Deployment Powers AI Data Center

Redwood has deployed its first microgrid at its Nevada campus, a 12-megawatt system with 63 megawatt-hours of capacity, powering a 2,000-GPU data center for Crusoe, an AI infrastructure company. Described as the “largest second-life battery deployment in the world,” it can store enough energy to power 9,000 homes, support 20 Amtrak trips between New York and Washington, D.C., or charge an EV for a 240,000-mile journey—roughly the distance to the moon. With over 1 gigawatt-hour of reusable batteries in its pipeline, Redwood is scaling up to meet rising demand.

Economic and Operational Benefits

By repurposing batteries, Redwood offers storage systems that cost “substantially less” than new projects, making renewable energy more accessible. These microgrids provide reliable power for applications like data centers, homes, or transportation infrastructure, reducing reliance on fossil fuels. Operationally, the modular design allows for easy scaling and integration, supporting both off-grid and grid-connected setups. This innovation aligns with growing industry trends toward circular economies, where materials are reused to minimize waste and environmental impact.

Regulatory and Industry Implications

As EV adoption accelerates, regulatory frameworks are evolving to manage battery disposal and recycling. Redwood’s approach supports compliance with emerging standards by diverting functional batteries from landfills. The company, founded in 2017 by former Tesla technologist JB Straubel, already recycles batteries from major players like Ford, Toyota, and Nissan, and produces battery components in South Carolina. This positions Redwood as a key player in the EV ecosystem, driving sustainability and cost efficiency.

Redwood’s initiative marks a significant step in addressing the growing challenge of EV battery waste while providing practical energy solutions. As the company expands its microgrid deployments, it could reshape how the industry views battery lifecycles, turning retired EV batteries into valuable assets for a cleaner energy future.

Photos courtesy of Redwood Materials.