With support from Nvidia and Eclipse, JB Straubel’s battery recycling startup expands into repurposed EV battery energy systems for AI data centers and industrial power
A Circular Economy Pioneer Shifts into Energy Storage
Redwood Materials, the battery recycling and materials company founded by former Tesla CTO JB Straubel, has raised $350 million in a Series E round to scale its energy storage business, a strategic move aimed at supporting the AI data center boom.
- The round was led by Eclipse Ventures, with a strategic investment from Nvidia’s NVentures.
- Redwood’s valuation now stands at $6 billion, according to a source familiar with the deal.
- The capital will fund energy storage deployments, refining capacity, and team expansion.
From Recycling Giant to AI Power Enabler
Redwood initially focused on creating a closed-loop battery supply chain by recycling scrap from battery cell production and consumer electronics to extract valuable materials like lithium, nickel, and cobalt. It sells those materials back to major partners like Panasonic, GM, and Toyota.
Now, it’s extending its mission with Redwood Energy, a new business unit focused on using retired EV batteries to power:
- AI data centers
- Industrial campuses
- Remote or off-grid facilities
These energy systems combine repurposed EV batteries with solar, wind, or even natural gas turbines to offer flexible, grid-tied or off-grid energy solutions — a critical need as AI compute demands soar.
Why Used EV Batteries Are a Goldmine
Unlike typical consumer electronics, EV batteries retain significant life even after retiring from vehicles. Redwood is leveraging this untapped capacity to build cost-effective energy storage systems.
- As of mid-2025, Redwood has 1 GWh of EV batteries stockpiled for reuse.
- The company recovers over 70% of all discarded battery packs in North America.
- Many batteries are not immediately recycled, but instead repurposed for energy storage.
By 2028, Redwood aims to deploy 20 GWh of grid-scale storage, positioning itself as the largest repurposer of EV battery packs in the U.S.
Strategic Synergy with AI and Nvidia
Nvidia’s investment signals how critical energy infrastructure is becoming to AI’s future. As AI models scale, so does their energy footprint, requiring stable, localized, and sustainable power.
Redwood’s offering is uniquely suited to this need:
- Modular battery systems for AI data centers
- Renewable + battery solutions to reduce carbon impact
- Backup systems to protect against grid instability
It’s a win-win for AI companies: access to energy that’s both sustainable and reliable.
Hiring and Expansion Ahead
Redwood plans to use the new funding to:
- Expand its energy systems engineering team
- Scale refining and cathode production capacity
- Strengthen logistics and operations to handle battery collection and repurposing
- Accelerate deployments of grid-tied and off-grid storage solutions
This is in line with Redwood’s broader mission to localize battery supply chains and minimize reliance on mined materials and foreign processing.
