General Motors and Redwood Materials have signed an agreement to build energy storage systems using new and recycled batteries from GM’s electric vehicles. Redwood Energy, a new business unit, will focus on creating low-cost storage systems for AI data centers. The companies aim to establish a domestic supply chain to manufacture batteries for energy storage applications.

Redwood Materials currently recycles around 20 gigawatt hours of batteries annually, equivalent to 250,000 EVs. GM is providing used batteries for Redwood’s energy storage systems, powering the largest second-life battery development and microgrid in North America. The increasing demand for electricity, driven by AI and electrification, necessitates flexible power solutions.

Redwood Materials plans to recycle cathode anode materials and production scrap from GM’s Ultium Cells battery plants to produce new batteries. The company is also collaborating with Toyota, Ford, and Volvo on battery recycling initiatives to make EV batteries more sustainable and reduce reliance on imported critical raw materials. Redwood aims to return 95-98% of critical minerals back to the domestic battery supply chain.

Founded by former Tesla CTO JB Straubel in 2017, Redwood Materials received a $2 billion loan commitment from the Department of Energy to expand battery materials recycling for the growing EV market. GM and Redwood Materials will provide more details about their collaboration later this year.

Read more at Yahoo Finance: GM, Redwood Materials sign deal to deploy energy-storage batteries