How $6B Redwood Materials is powering data centers without overloading the grid

In the rolling hills near Reno, Nevada, a field of solar panels hides an unexpected sight: a data center that doesn’t inflate local electricity bills. Instead of drawing power from the grid, this modular facility runs entirely on solar energy and hundreds of second-life electric vehicle (EV) batteries.

This innovative setup is the result of a partnership between Crusoe and Redwood Materials, a $6 billion startup founded and led by CEO JB Straubel. Straubel recognized an opportunity in the growing number of used EV batteries that still retain significant capacity and value. Rather than manufacturing new batteries—an expensive and supply chain-dependent process—Redwood repurposes these secondhand batteries to create scalable, cost-effective energy storage solutions for utilities and microgrids.

“I have kind of an aversion to waste, personally. It pains the engineer in me to watch that happen, even though we certainly could recycle these packs, and we do every day. That was the impetus for thinking that there must be a better way. There’s got to be some way we can take advantage of that and be one of the first to really scale it up.”

Straubel’s insight arrived just as the energy storage market was entering a period of explosive growth. In the U.S., a record 18.9 gigawatts of energy storage capacity were added last year—enough to power roughly 15 million to 20 million homes instantaneously. California recently set a new benchmark, with batteries supplying 43% of the state’s total power at one point. The U.S. Energy Information Administration projects that battery storage capacity will surge by more than 50% between now and early 2027, driven by the need to store renewable energy and meet surging electricity demand from new data centers.

As some data centers turn to new gas plants—collectively emitting pollution comparable to entire countries—Redwood’s low-cost batteries offer a cleaner alternative. For data center developers, these batteries provide a way to bypass lengthy utility wait times and comply with the White House’s requirement to supply their own power. Utilities benefit from a lower-cost method to store renewable energy, while factories can use the batteries to store grid power during off-peak hours for later use.

With access to a steady supply of second-life EV batteries, Redwood is rapidly deploying hundreds of megawatt hours of energy storage systems. This capacity is equivalent to the power needs of a small city, positioning the company at the forefront of a critical shift in how data centers and utilities manage energy demands.