Will repurposing retired EV batteries significantly reduce the carbon footprint of AI infrastructure?

Redwood Materials, founded by Tesla co-founder JB Straubel, has pioneered a battery recycling process that reduces carbon emissions by up to 70% compared to traditional mining and refining methods. Their hydrometallurgical and reductive calcination technologies reclaim over 95% of valuable minerals like lithium, nickel, and cobalt from used EV batteries without relying on fossil fuels.

This approach not only reduces energy consumption by up to 80% but also significantly decreases water use and waste production, making it one of the most sustainable battery recycling methods available today.

The environmental impact of repurposing EV batteries for AI data centers

AI data centers are projected to consume enormous amounts of electricity, with AI operations alone expected to use 90 terawatt-hours annually by 2026, representing over 40% of critical data center power. By repurposing retired EV batteries, which typically retain 50% to 80% of their original capacity, Redwood Materials extends their useful life in stationary energy storage systems.

This second-life use diverts batteries from waste streams and reduces the need for new battery production, directly cutting the carbon footprint of powering AI infrastructure. The company’s first deployment, a 12 MW microgrid with 63 MWh storage capacity powering a 2,000-GPU AI data center, is the largest second-life battery project worldwide, demonstrating scalable impact.

Did you know?
Redwood Materials processes more than 20 gigawatt-hours of used lithium-ion batteries annually, equivalent to batteries from about 250,000 electric vehicles, recycling 90% of lithium-ion batteries in North America.

Economic and sustainability benefits of a circular battery supply chain

Beyond environmental gains, Redwood Materials’ closed-loop system offers compelling economic advantages. Recovering battery minerals locally reduces dependence on overseas mining and refining, particularly from regions like China, which dominates lithium refining. This local recycling supply chain slashes emissions from transportation and processing, further shrinking the carbon footprint.

Analysts note that this model shortens the environmental breakeven point of EVs to less than 15,000 miles driven, a significant improvement over traditional supply chains. As Redwood aims to deploy 20 gigawatt-hours of second-life battery storage by 2028, the scale of carbon savings and economic benefits will multiply.

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Challenges and future outlook for battery repurposing in AI infrastructure

While the environmental and economic benefits are clear, challenges remain in scaling battery repurposing for AI data centers. Efficiently collecting, testing, and integrating retired batteries requires robust logistics and technical expertise. Additionally, evolving battery chemistries and AI energy demands will necessitate continuous innovation in storage solutions.

However, Redwood’s leadership and investment backing, including $2 billion in equity and loans, position it well to overcome these hurdles. The company’s vision aligns with global trends toward decarbonizing technology infrastructure and advancing circular economies, making battery reuse a critical pillar for sustainable AI growth.

Redwood Materials’ role in shaping a low-carbon AI future

By transforming end-of-life EV batteries into power sources for AI data centers, Redwood Materials exemplifies how industrial innovation can address climate challenges while supporting technological advancement. This strategy not only reduces the carbon footprint of AI infrastructure but also creates a model for other sectors reliant on energy-intensive data processing.

As AI’s energy appetite grows, integrating sustainable battery storage solutions will be essential to balancing performance with planetary health. Redwood’s approach signals a promising shift toward cleaner, circular energy systems that can power the next generation of digital innovation responsibly.