Tesla co-founder JB Straubel highlighted Redwood Materials’ initiative to recycle used EV batteries into low-cost energy storage microgrids that power AI data centers, extending battery life and reducing strain on the power grid. He expressed optimism about the growing EV market, the localization of battery supply chains in North America, and Tesla’s future amid evolving technologies and leadership changes.
Tesla co-founder and board member JB Straubel discussed his new initiative through Redwood Materials called Redwood Energy, which focuses on recycling used electric vehicle (EV) batteries to create low-cost energy storage solutions for data centers. At a site in Nevada, Straubel showcased a microgrid composed of hundreds of recycled automotive battery packs that power an AI training data center operated by Crusoe. These repurposed batteries, even at around 50% capacity, still hold significant energy storage potential, making them ideal for such applications and extending their useful life by an additional three to five years.
Straubel emphasized the growing supply of recycled EV batteries, driven by the millions of EVs already on the road. Despite a recent slowdown in EV sales growth, the volume of materials available for recycling is doubling annually. He highlighted the advantages of using these microgrids, particularly their rapid deployment—completed in about four months—and their ability to operate independently of the traditional power grid, thus avoiding additional strain on existing infrastructure. This approach offers a timely solution to meet the increasing power demands of AI and other data-intensive industries.
Regarding the broader EV market, Straubel expressed optimism despite uncertainties around government incentives like the Inflation Reduction Act. He believes EVs have passed a tipping point, with record growth continuing each quarter. While growth rates may moderate, the overall market share of EVs, currently around 9%, is expected to rise steadily. He also noted that once consumers switch to EVs, very few revert to internal combustion vehicles, indicating a strong and lasting shift in consumer behavior.
On the topic of supply chains, Straubel acknowledged the current dominance of China in battery processing but highlighted efforts, including those by Redwood Materials, to localize supply chains in North America. He is confident that within three to four years, more battery assembly and critical material processing will occur domestically, supported by policies that encourage local production. This shift aims to reduce dependency on foreign sources and mitigate potential tariff impacts, strengthening the North American EV industry.
Finally, Straubel addressed concerns about Tesla’s future amid leadership changes and evolving company priorities. He remains confident in Tesla’s talent pool and the company’s growth prospects, emphasizing the continued importance of EVs alongside emerging technologies like autonomy and robotics. He expressed optimism about the future of energy, transportation, and technology, envisioning a wave of growth and prosperity driven by innovation in these sectors.