Redwood Materials Targets AI Data Centers with EV Batteries

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Key Takeaways

1Redwood Materials is deploying second-life electric vehicle battery energy storage systems for Rivian and Crusoe

2The company offers behind-the-meter architectures, combining recycled batteries and solar energy, to power AI data centers

3Connecting to the electrical grid can take years, hence the need for on-site solutions

💡Why it matters — AI data centers need quick access to electricity, and Redwood Materials provides an alternative to the lengthy connection times to the congested grid.

Redwood Materials is deploying energy storage systems based on second-life electric vehicle batteries and on-site sources. After a 10-megawatt-hour installation at Rivian and a system for Crusoe in Nevada, the company is developing behind-the-meter architectures to accelerate electricity access for AI data centers.

Systems Already Installed at Rivian and Crusoe

Redwood Materials recycles used batteries from Rivian and installs energy storage systems in its factories, including a 10-megawatt-hour installation at the Illinois plant. The company has also built a battery system for a data center operated by Crusoe in Nevada. These projects integrate power electronics and software developed by Redwood, thus expanding its business beyond recycling.

A Behind-the-Meter Model Combining Second Life and Solar

Redwood Materials is betting on behind-the-meter energy systems designed to operate independently of the electrical grid. The company plans to combine batteries from end-of-life electric vehicles with solar panels and other local energy sources. This setup aims to provide customers with the ability to generate and store electricity on-site, utilizing second-life batteries.

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The Major Constraint: Multi-Year Connection Delays

JB Straubel emphasizes that connecting to the grid can take years. According to him, the speed of access to energy is a central issue, as demand related to AI accelerates the race for electricity. Redwood Materials positions itself as a solution for AI data centers looking to avoid waiting for new connections on a saturated U.S. grid.

A Shift Beyond Recycling with Redwood Energy

Last year, Redwood Materials launched the Redwood Energy division, recognizing that electric vehicle batteries retain years of useful life after being removed from cars. The company is thus expanding beyond the collection and processing of old batteries to offer a method that accelerates the power supply to AI data centers. JB Straubel aims to help these customers obtain electricity more quickly by building on-site systems using recycled batteries, a direction he presents as a major opportunity. Investors initially supported Redwood for recycling; this repositioning marks a new stage in the company's evolution, already a partner of Rivian and supplier of a system for Crusoe in Nevada.