Bryan Johnston General Motors and Redwood Materials, a leading battery recycling and energy storage company founded by Tesla co-founder JB Straubel, announced a new collaboration on Tuesday aimed at turning both new and used electric vehicle batteries into grid-scale energy storage systems. The partnership reflects a growing urgency in the U.S. to expand domestic energy infrastructure as the country braces for a surge in electricity demand, much of it driven by the rapid rise of artificial intelligence and the electrification of transportation and industry. The two companies have signed a non-binding memorandum of understanding to accelerate the development of stationary energy storage systems using GM’s U.S.-manufactured batteries, as well as second-life battery packs removed from retired electric vehicles. Though still in its early stages, the agreement signals a significant evolution in how battery technology may be repurposed to strengthen the U.S. energy grid. “The market for grid-scale batteries and backup power isn’t just expanding, it’s becoming essential infrastructure,” said Kurt Kelty, GM’s vice president of batteries, propulsion, and sustainability, in an interview. “Electricity demand is climbing, and it’s only going to accelerate. To meet that challenge, the U.S. needs energy storage solutions that can be deployed quickly, economically, and made right here at home.” Mr. Kelty added that GM’s battery systems—already powering millions of electric vehicles—can play a vital role in building resilient infrastructure capable of responding to energy shortages and stabilizing peak loads. “We’re not just making better cars—we’re shaping the future of energy resilience,” he said. The announcement comes just weeks after Redwood launched a new business unit, Redwood Energy, focused on deploying energy storage systems made from both recycled and new battery modules. These systems, designed for speed and cost efficiency, are being positioned to meet rising energy needs from data centers, utilities, and industrial users. At the heart of this emerging industry is the need for scalable, sustainable storage to support intermittent renewable sources and surging electricity demand. Analysts say AI data centers, in particular, are expected to triple their share of national power usage—from 4.4 percent in 2023 to roughly 12 percent by 2028—placing unprecedented strain on the grid. Redwood’s approach combines used battery packs from EVs, like those produced by GM, with new modules manufactured domestically. According to JB Straubel, Redwood’s founder and chief executive, this hybrid strategy gives the company flexibility to meet deployment needs quickly while reducing waste and reliance on foreign supply chains. “Electricity demand is accelerating at an unprecedented pace,” Mr. Straubel said. “Both GM’s second-life EV batteries and new batteries can be deployed in Redwood’s energy storage systems, delivering fast, flexible power solutions and strengthening America’s energy and manufacturing independence.” The companies point to a recent project in Sparks, Nevada, as a demonstration of their potential. There, GM’s second-life batteries are helping power a 12-megawatt, 63-megawatt-hour microgrid—reportedly the largest second-life battery installation in the world. The system is providing resilient energy for Crusoe, a digital infrastructure firm building AI and compute platforms. Redwood and GM expect to build on that experience with larger and more widely distributed systems. The shift toward battery-based grid storage aligns with broader national goals to decarbonize the electricity sector while improving reliability. Energy storage systems can absorb power when it’s abundant—like during peak solar production hours—and dispatch it when demand surges or the grid is under stress. But supply chains for new battery components remain limited, and the recycling and repurposing of old batteries is seen as an increasingly vital supplement. GM, which has been investing heavily in its battery manufacturing operations through its Ultium platform, sees grid-scale energy storage as a natural next step in the life cycle of its products. The collaboration with Redwood builds on previous partnerships between the two companies related to battery recycling and materials recovery. For now, the companies are not disclosing financial terms or specific production targets tied to the agreement. More details are expected to be shared later in 2025. While the memorandum is not yet a binding commitment, it reflects a shared ambition: to deploy American-made battery technology beyond vehicles and into the fabric of the nation’s energy system. “Our goal is to build a closed-loop ecosystem—from battery materials to EVs to energy storage,” Mr. Straubel said. “With partners like GM, we’re getting closer to making that vision a reality.” Categories