Redwood Materials says its new energy storage business is the fastest growing unit within the company.

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Redwood Materials, the battery recycling startup founded by former Tesla CTO JB Straubel, has rapidly grown a new energy storage business unit since launching it in June 2025, driven by surging demand from AI data centers. The San Francisco R&D lab has expanded four-fold to 55,000 sq ft with nearly 100 employees. The business repurposes collected EV batteries not yet ready for recycling to supply power to data centers, with its first customer being Crusoe. A recent $425M Series E round backed by Google and Nvidia will fund further scaling. The company is now pursuing hyperscaler customers with projects in the hundreds of megawatt-hours to multiple gigawatt-hours range, as data center operators face 5+ year grid connection wait times.

An AI data center boom is fueling Redwood’s energy storage business

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