GM and Redwood Materials Partner for EV Battery Data Center Power

GM and Redwood Materials Expand Battery Recycling and Repurposing Partnership

General Motors is now providing both used and new electric vehicle (EV) batteries to Redwood Materials for advanced recycling and repurposing initiatives, as jointly announced by the two companies.

Second-Life Application in Nevada

Batteries originating from GM vehicles have already undergone Redwood’s processing and are currently operational within a 12 megawatt microgrid located at the company’s headquarters in Sparks, Nevada.

The electricity generated by this installation is directly supplied to a nearby data center operated by Crusoe, which houses 2,000 GPUs.

Redwood’s Energy Storage Division

This microgrid is a key component of Redwood’s recently launched energy storage division, unveiled publicly in June.

The division concentrates on extending the usability of EV batteries by repurposing them for large-scale grid energy storage applications.

Comprehensive testing conducted by Redwood revealed that a significant number of received battery cells retained substantial remaining capacity.

Repurposing Instead of Immediate Recycling

Instead of immediately dismantling the batteries for material recovery, Redwood maintains the packs’ structural integrity.

These intact packs are then interconnected to form a substantial energy storage system.

This system is designed to store surplus electricity, frequently sourced from renewable sources like solar and wind power, for subsequent utilization.

The batteries powering the Crusoe data center are specifically charged by on-site solar panels.

Growth Potential of Energy Storage

JB Straubel, co-founder and CEO of Redwood, previously stated that he anticipates the energy storage business to expand at a rate exceeding that of the core recycling operations.

Redwood currently recovers approximately 70% of all used or discarded batteries within the United States.

The company has set a goal to deploy 20 gigawatt-hours of energy storage capacity by the year 2028.

Competitive Advantage

While Redwood is not alone in pursuing this strategy, its capability to integrate diverse battery packs – originating from various manufacturers and utilizing different chemical compositions – potentially provides a competitive advantage.

Expanded Collaboration

An existing agreement between GM and Redwood forms the foundation for this expanded collaboration.

Hedging Against EV Sales Fluctuations

A significant aspect of this partnership is GM’s commitment to supply Redwood with new batteries, in addition to used ones.

This provides a buffer against potential inconsistencies in EV sales figures.

EV sales experienced a 6.3% decline in the second quarter of the current year, as reported by Cox Automotive.

However, a surge in sales is anticipated prior to the phasing out of tax credits on September 30th.

Growth in Energy Storage Demand

In contrast to EV sales, the energy storage sector has demonstrated consistent growth in recent years.

New installations in the first quarter of this year reached a record high, representing a 57% increase compared to the same period in the previous year.