Redwood Materials Launches Energy Storage Business, Targets AI Data Centers First

Redwood Materials is entering the energy storage market, and its first stop is AI data centers.

The Nevada-based company, founded by former Tesla CTO JB Straubel, is launching Redwood Energy, a new business that repurposes used EV batteries to store and supply clean energy. The debut project powers a modular AI data center built by Crusoe, a startup known for its AI infrastructure work.

The site, located in the Nevada desert, uses 805 retired EV batteries paired with a solar array to generate 12 MW of power with 63 MWh of capacity. This isn’t a demo, it’s a fully operational and profitable microgrid.

According to Straubel, the system was built in four months and is already making money. As Redwood grows, more projects are coming this year.

Redwood Materials already processes over 20 GWh of batteries annually, recovering more than 70% of used battery packs in North America. Now, with more than 1 GWh of batteries stockpiled and 4 more on the way, the company aims to deploy 20 GWh of grid storage by 2028.

Redwood’s new energy storage push addresses a major gap in the clean energy sector: how to reuse EV batteries before recycling. The system can run off-grid with solar or wind, or connect to traditional power grids, making it a flexible, carbon-free energy solution.

With this move, Redwood not only unlocks a new revenue stream but strengthens its position in the circular battery economy.