Strategic Funding for Energy Storage Expansion
Redwood Materials, the battery recycling and materials company founded by former Tesla CTO JB Straubel, has secured $350 million in Series E funding to accelerate its emerging energy storage business. The substantial investment round was led by venture firm Eclipse and notably included strategic participation from Nvidia’s venture capital arm, NVentures, signaling the growing importance of sustainable power solutions for energy-intensive AI infrastructure.
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While the company didn’t publicly disclose its valuation, industry sources indicate Redwood Materials is now valued at approximately $6 billion, representing a significant $1 billion increase from its previous valuation. This funding surge comes at a critical time as the company positions itself to address the massive power demands of AI data centers through innovative battery repurposing strategies., as covered previously
From Recycling to Grid-Scale Energy Storage
What began in 2017 as a mission to create a circular battery supply chain has evolved into a multi-faceted operation addressing critical gaps in the energy storage ecosystem. Redwood’s core business of recycling battery production scrap and consumer electronics continues to thrive, processing discarded materials to extract valuable metals like cobalt, nickel, and lithium that are typically mined. These materials are then supplied back to major manufacturers including Panasonic, GM, and Toyota., according to recent research
The company’s newest venture, Redwood Energy, represents a strategic pivot toward leveraging its massive inventory of retired EV batteries for grid-scale energy storage. Rather than immediately recycling batteries that still have substantial usable life, the company has developed systems to repurpose these units for stationary storage applications, particularly targeting the booming AI data center market.
Powering AI’s Energy Demands with Repurposed Batteries
Redwood Energy’s approach addresses a critical challenge facing the AI industry: the enormous power requirements of data centers. The company connects thousands of retired EV batteries to renewable energy sources like wind and solar, creating off-grid systems that can deliver reliable power to AI facilities and other large-scale industrial sites.
The scale of Redwood’s battery inventory is staggering. The company currently recovers more than 70% of all used or discarded battery packs in North America and had stockpiled over 1 gigawatt-hour worth of batteries suitable for energy storage as of June. These systems can be integrated with traditional grid infrastructure or connected to natural gas turbines and future nuclear generators for comprehensive energy management.
Ambitious Growth Trajectory
Redwood Materials plans to deploy the new capital across multiple strategic areas:
- Expanding energy storage infrastructure to meet growing AI data center demands
- Increasing refining and materials production capacity to support battery manufacturing
- Growing engineering and operations teams to accelerate deployment
- Scaling cathode production capabilities to strengthen the domestic battery supply chain
The company has set an ambitious target of deploying 20 gigawatt-hours of grid-scale storage by 2028, which would position it as the largest repurposer of used EV battery packs in the industry. This expansion comes at a crucial moment when energy storage solutions are becoming increasingly vital for supporting both renewable energy integration and the power-intensive requirements of artificial intelligence infrastructure.
The Bigger Picture: Sustainable Power for Digital Transformation
Redwood Materials’ evolution from battery recycler to comprehensive energy storage provider reflects a broader trend in the industrial and technology sectors. As AI and data center operations consume increasingly substantial amounts of power, companies are seeking sustainable, reliable energy solutions that don’t compromise environmental goals.
The strategic investment from Nvidia particularly underscores how major technology players recognize the critical intersection between computational advancement and energy infrastructure. By creating circular systems that extend the useful life of EV batteries while supporting clean energy deployment, Redwood Materials is positioning itself as a key enabler of both the electric vehicle transition and the AI revolution.
For organizations exploring energy storage solutions, Redwood’s approach demonstrates how retired EV batteries can provide substantial value in second-life applications, potentially offering cost-effective alternatives to traditional grid infrastructure while supporting sustainability objectives.
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