It’s a bold move from the startup, Redwood Materials, founded in 2017 by JB Straubel, former Chief Technology Officer of Tesla. They’ve just launched a new municipal energy storage business to boot! As the company works to create a circular supply chain, this supply chain will not only produce electric vehicles (EVs) but power the growing energy needs of the artificial intelligence (AI) data centers. Redwood Materials has recently announced a large $2 billion round of private funding. Combined with this huge investment, they’re poised to make an enormous impact across the energy storage sector.
That launch comes at a time of skyrocketing demand for energy storage technologies. This growth is largely driven by the blazing adoption of electric vehicles (EVs) and artificial intelligence (AI) innovations. Redwood Materials has already begun harvesting consumer batteries and production scrap in preparation for this upcoming wave. The company processes more than 20 gigawatt-hours (GWh) of batteries each year — that’s enough to power about 250,000 EVs! In the next few months, Redwood anticipates receiving another 4 GWh of incoming capacity, continuing to increase its own manufacturing power.
Redwood Materials runs a 3rd generation, best-in-class recycling facility on its 175-acre campus in Sparks, Nevada. This facility is key to its mission of delivering a circular supply chain for battery materials. The company uniquely collects and sorts materials through a variety of sources, including post-industrial manufacturing scrap and post-consumer electronics. This is an important practice for creating batteries in a sustainable way.
As part of its strategic growth, Redwood Materials is ramping up to open a second 600-acre facility in Charleston, South Carolina. This expansion will power the company’s daring dream to grow. By late this year, they want to be producing 100 GWh/y of cathode active material and anode foil. Most of Redwood’s $200 million in annual revenue by 2024 will come from these battery materials.
The company’s ambitions go far beyond just recycling batteries — it wants to have 20 GWh of grid-scale storage deployed by 2028. This project uses a microgrid that generates 12 megawatts (MW) of electricity. It has a staggering capacity of 63 megawatt-hours (MWh). The microgrid now feeds a Crusoe-built modular data center, part of an artificial intelligence infrastructure company.
JB Straubel understood the staggering potential of this new enterprise. He added, “I think this has more of a potential to grow faster than the core recycling business.” This capability is a perfect example of Redwood’s visionary thinking. They hope to recycle batteries, but through doing so, create energy solutions that power the complexities of today’s technology.
Colin Campbell, a representative from Redwood Materials, noted the dual benefits of their approach: “It’s a good economic choice that happens to be carbon-free.” The latter statement highlights how the company continues to push sustainability goals even when the economics don’t always pencil out.
Jessica Dunn, another key figure within Redwood, remarked on the current recycling landscape: “Right now, the recycling market is mostly manufacturing scrap, consumer electronics, and EV batteries that have failed under warranty.” Dunn’s remarks underscore some of the challenges and opportunities facing the recycling industry as it realigns itself to respond to new marketplace realities.
Moreover, Dunn pointed out the broader implications of Redwood’s initiatives: “This really demonstrates how economical the waste hierarchy actually is.” Through this commitment to recycling and repurposing their own project materials, Redwood Materials is leading the way for other companies and creating an obligation to the industry.
In preparation, Redwood has stockpiled more than 1 GWh of batteries in its inventory. That enviable position lays the groundwork for phenomenal growth to come. By the end of the decade, the company anticipates that its production capacity will soar to an impressive 500 GWh. This ambitious target reflects Redwood’s commitment to meeting both current and future demand for battery materials and energy storage solutions.
Redwood Materials is a company that is always pushing the boundaries and expanding their ecosystem. Collectively, their efforts have the potential to significantly transform the energy storage and recycling landscape. The company embeds sustainability into its business model. Nationally, this approach addresses pressing environmental issues while laying the groundwork for technological progress increasingly built upon more efficient energy solutions.
