July 2, 2025 - Redwood Materials Adds Energy Storage

This is the Telemetry Transportation Daily for June 30, 2025 and I'm Sam Abuelsamid, VP of Market Research for Telemetry.

Since its founding in 2017, Redwood Materials has focused primarily on recycling lithium-ion batteries and has grown to be one of the biggest companies in the sector. Recycling is critical, making vehicle electrification truly sustainable by reducing the need for raw material extraction and preventing end-of-life batteries from going into landfills. Up to this point, Redwood has produced new battery materials from a mix of consumer electronics and EV batteries. However, due to the long life of EV batteries, with most still being very usable well into a second decade and the relatively recent scaling up of EV production, the supply of those batteries has been limited. It will take some years before there are enough batteries to replace most of the virgin materials going into battery production. 

Redwood is already taking in more than 20 GWh of batteries annually. However, it's finding that a significant portion of those batteries still have over 50% of their original usable capacity. While those batteries could certainly be recycled, it actually makes more sense to put them to second-life uses for as long as possible, since producing a new battery takes more energy than continuing to use an old one. 

Thus Redwood is now utilizing those batteries for energy storage systems. U.S. electricity demand has remained relatively flat for the past 25 years, but it is now anticipated to double in the next 15 years to as much as 8 TWh by 2040. That is driven by the growth of AI data centers so energy storage is key to reducing the load on the grid. Redwood estimates that by 2028, data centers could consume 12% of US electricity. That's why LG Energy Solution switched its Holland, MI plant from EV batteries to storage and Redwood has developed a system to utilize old batteries. 

Redwood is leveraging its existing logistics network to collect end-of-life EV batteries, test them,  and then integrate them into a system that can utilize packs from multiple automakers and mixed chemistries. Once the packs reach the end of their useful life for storage, Redwood recycles them to recover the materials and put it back into the production stream for new cells.  If the budget bill passes as currently written and EV incentives disappear by the end of September, it's likely that more companies will be looking to leverage both new and used batteries for energy storage systems.

Thanks for listening.