The surging demand for electricity from American data centers and reshored factories may find an unlikely ally in the millions of electric vehicle batteries now aging in driveways across the country. Redwood Materials, the battery recycling firm founded by former Tesla executive JB Straubel, is advancing a plan to repurpose end-of-life EV battery packs into grid-scale energy storage systems, prioritizing US supply chains over foreign dependency.
Storing Power for Domestic Demand
With electricity consumption projected to skyrocket, largely driven by the computing needs of artificial intelligence, the strain on the domestic grid is a looming national constraint. Redwood estimates that AI data centers alone could draw 12% of all US electricity by 2028. Building new transmission infrastructure is a slow process mired in regulatory hurdles. The immediate solution, the company argues, is to deploy second-life batteries to balance the grid while new baseload power generation—including coal and nuclear—is secured.
The company currently processes over 70% of recycled batteries in North America. Rather than shredding every pack for raw minerals, Redwood is developing technology to standardize battery packs from over 100 different vehicle models into stable, stationary storage units. This process keeps valuable lithium, copper, and rare earth elements circulating in American industry without requiring new mining permits.
“That’s roughly 1 terawatt-hour of used EV battery capacity coming available in the US by 2040. Beginning in the early 2030s, these second-life batteries could supply about half of the country’s energy storage demand.”
By prioritizing the repurposing of domestically available hardware, the initiative lowers the cost barrier for energy storage while maintaining the integrity of the domestic supply chain. Redwood aims to supply 400 gigawatt-hours of that capacity directly, targeting factories and power grids that currently face brownout risks or rely on intermittent renewable sources.
For American workers, the strategy offers a dual benefit: mitigating the skyrocketing electricity costs that threaten industrial competitiveness and reducing the regulatory pressure to fast-track foreign-sourced battery minerals. Any units that cannot be safely reused will be recycled to recover critical materials, closing a loop that supports economic nationalism in the energy sector.