America's fast-growing fleet of electric vehicles could become an unexpected source of electricity storage as the country races to meet surging power demand from AI.
That's according to Redwood Materials, a startup founded by former Tesla CTO JB Straubel, which now recycles more than 70% of all the batteries in North America.
With millions of EV batteries coming to the end of their lives over the next decade and beyond, Redwood has adapted its business to repurpose many of these batteries to store electricity for the power grid, factories, and AI data centers rather than being immediately recycled.
The proposal comes as electricity demand is rising after years of relatively flat growth. AI data centers, factories coming back to America, and a broader shift toward electrification are putting increasing pressure on the US grid. Redwood cited projections that AI data centers alone could consume 12% of US electricity by 2028.
Meeting that demand has proved difficult because building new transmission lines and other grid infrastructure takes many years. Large battery storage systems can help balance electricity supply and demand while utilities wait for new infrastructure to come online.
Redwood argues that one overlooked source of those batteries is already sitting in American driveways.
More than 6 million electric vehicles have been sold in the US over the past decade. As those vehicles age, many of their battery packs will no longer provide enough driving range for cars, but could still have years of useful life storing electricity.
Redwood estimates roughly 1 terawatt-hour, or 1,000 gigawatt-hours, of used EV battery capacity will become available in the US by 2040. Beginning in the early 2030s, those second-life batteries could supply about half of the country's energy storage demand during that period, the company estimates. And it's aiming to provide about 400 gigawatt-hours of this supply.
The company said it is developing technology that allows battery packs from more than 100 different electric vehicle models to be combined into standardized energy storage systems. Batteries that cannot be safely reused would instead be recycled to recover valuable materials such as lithium, copper, and rare earth minerals.
Redwood said the approach could create lower-cost energy storage while keeping battery materials inside US supply chains.
If successful, the strategy would turn aging EV batteries from a recycling challenge into an energy asset at a time when reliable electricity is becoming one of the biggest constraints on America's AI ambitions.
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Alistair Barr is the author of Business Insider's Tech Memo newsletter. Sign up here. Before that, he was BI's Global Tech Editor and the Big Tech team leader at Bloomberg, following a reporting career at The Wall Street Journal, USA Today, Reuters, and MarketWatch. Alistair won a Gerald Loeb Award in 2007 for coverage of short selling and was a finalist in 2013 for scoops on the Facebook IPO. More recently, he won a 2024 San Francisco Press Club award for commentary. Got a tip? Reach out using the secure messaging app Signal (+1 415-341-4927) or via email on [email protected].ExpertiseAlistair oversees all things Big Tech, along with startups and venture capital. He writes analysis and columns about topics including generative AI, large language models, cloud computing, semiconductors, online search, e-commerce, EVs, robotics, and autonomous vehicles.Popular StoriesArtificial Intelligence:It's getting harder to make big leaps at the frontier of AIOpenAI's AI-adjusted earnings numbers have echoes of Groupon and WeWorkDeath by LLM: Stack Overflow's decline, and its plan to survive, shows the future of free online data in an AI worldCloud computing:Amazon dominated the first cloud era. The AI boom has kicked off Cloud 2.0, and the company doesn't have a head start this time.In cloud, there's AI (which is hot) and everything else (which is not)Chips:Why Intel is still so important: Real countries have fabsApple's made-in-the-USA chips signal a turnaround for the US's big semiconductor betEVs and Tesla:Tesla's AI supercomputer has a Silicon Valley town rushing to meet surging electricity demandTesla's Cybertruck is outselling almost every other EV in the USOnline Search:Google is losing its status as a verbA simple way to fix search: Bright pink ads
