Old EV batteries are no longer just a recycling issue. Redwood Materials is using them to power Crusoe's AI computing in Nevada, but the real story is that automakers now want a piece of the same static energy storage market.

The most interesting AI infrastructure story in Nevada isn't another giant training cluster with new chip numbers. It's a battery farm. At Redwood Materials' facility in Sparks, used EV battery packs are connected to a 12 MW, 63 MWh microgrid that powers Crusoe's 2,000-GPU modular data center for the AI infrastructure company.

This should catch your attention. Data centers face the same challenge across every market: securing capital, purchasing servers, and finding land often happens faster than securing reliable power. While a second-life battery system sitting next to computing equipment can't fix the American grid, its purpose is narrower and more practical. It enables a power-hungry location to quickly launch operations.

As The Verge reported when Redwood launched its Redwood Energy division in June 2025, the company claims the Nevada project is the world's largest second-life battery deployment. Redwood also states it processes over 20 GWh of batteries annually, equivalent to approximately 250,000 EVs, representing about 90% of lithium-ion batteries and battery materials recycled in North America. These figures make this story far more than a clever pilot.

Here's the key point: retired EV batteries don't truly "die." They may no longer be suitable for vehicles because automobiles require balancing weight, range, warranty risk, and fast charging. But Business Insider notes that many battery packs Redwood processes retain 50% to 80% of their original capacity. For stationary storage—fixed on the ground, behind a fence—that remaining lifespan has real value.

Redwood's argument is straightforward. Test battery packs, grade them, group those still viable, and use them before complete material recovery. No need to slap a circular economy label on it. The expensive cells have already been manufactured, paid for, driven, depreciated, and recycled. If they can sit next to a data center storing power for years before being broken down into lithium, nickel, cobalt, and copper, throwing them straight into a furnace would be wasteful.

The AI boom makes this waste harder to accept. Goldman Sachs predicts data center power demand could rise 165% from 2023 levels by 2030, while Axios recently noted that tech giants face pressure to pay for their own power as communities blame data centers for straining the grid. You can see how batteries that once looked like a scrap problem now look like infrastructure inventory.

General Motors isn't sitting on the sidelines. In June 2026, General Motors announced a partnership with Peak Energy to develop and manufacture sodium-ion battery cells for stationary energy storage systems used by utilities, data centers, and other large power customers. TechRadar reported that Peak's passive-cooled sodium-ion system claims to reduce storage costs by 20% compared to lithium-ion solutions, while General Motors brings cell design and manufacturing expertise from its EV business.

Sodium-ion isn't a magic replacement for lithium in vehicles. It has lower energy density, which is a serious problem when trying to squeeze range into a car. For a storage box on the ground, weight matters less. General Motors' Kurt Kelty was direct in the company statement: utilities and hyperscale cloud operators care about reliable, affordable power supply that works under real conditions over the long term, not maximum driving range.

Ford is also moving. MarketWatch reported in May 2026 that Ford signed a five-year agreement with EDF Power Solutions North America allowing EDF to purchase up to 4 GWh of Ford battery storage systems annually, or 20 GWh over the entire period, with deliveries expected to begin in 2028. Ford states it hopes to deploy at least 20 GWh of storage products annually. If the company follows through, this is no sidecar project.

You can frame these moves as climate strategy, and there's certainly an element of that. But honestly, the business case is far more solid than the messaging. Automakers have spent years building battery supply chains for EVs. Now they see a second market for the same expertise, right at the moment when AI companies desperately need faster power solutions.

The weakness is supply. While Redwood can handle significant volumes of used batteries, the first wave of large-scale EV retirements is still forming. New lithium-ion storage prices are also continuously falling, meaning second-life systems must prove that testing, integration, safety work, and maintenance don't erode cost advantages. This is the real test, not whether the idea sounds cool on a conference stage.

Still, the Nevada project changes the conversation. Used EV battery packs that once looked like waste can now sit behind an AI data center, helping GPUs keep running. If you're building compute, manufacturing vehicles, or investing anywhere near the power stack, you should watch this shift. Old batteries are becoming part of new data centers.