Rivian Automotive is turning its worn-out EV batteries into the very power source fueling its Illinois factory. The electric-vehicle maker struck a deal with Redwood Materials to repurpose more than 100 second-life battery packs. Those packs now deliver an initial 10 megawatt-hours of dispatchable energy at the Normal, Illinois, plant. Peak grid demand? Slashed. Utility bills? Lowered. And the grid gets a breather.
This setup marks the largest repurposed battery energy storage system for any U.S. automaker’s manufacturing site, according to the companies’ joint announcement. Rivian supplies the packs straight from its fleet once they’ve hit the end of vehicle life. Redwood integrates them using its Redwood Pack Manager software, which handles mixed chemistries and health states to act as one unified asset. Boom. Instant on-site power.
JB Straubel, Redwood’s founder and CEO—once Tesla’s CTO—laid it out plainly. “Our partnership with Rivian shows how EV battery packs can be turned into dispatchable energy resources, bringing new capacity online quickly, supporting critical manufacturing, and reducing strain on the grid without waiting years for new infrastructure,” he said in Yahoo Finance. Electricity demand races ahead of grid builds. Second-life batteries bridge that gap.
Rivian CEO RJ Scaringe sees EVs as untapped reserves. “EVs represent a massive, distributed and highly competitive energy resource,” Scaringe stated. “As energy needs grow, our grid needs to be flexible, secure, and affordable.” His company isn’t just talking. It’s deploying.
Redwood’s Energy Push Amid AI Power Crunch
Redwood launched its Redwood Energy unit back in June 2025, eyeing the surge in demand from AI data centers and factories. Straubel noted then: “Electricity demand is accelerating faster than the grid can expand, posing a constraint on industrial growth.” The U.S. already holds billions in battery assets ripe for reuse. Over 100,000 EVs hit roads’ end this year alone, packing 350 gigawatt-hours total as the fleet swells.
Redwood’s track record? Massive. In 2024, it recycled 20 gigawatt-hours of batteries—equal to 250,000 EVs and 90% of North America’s lithium-ion recycling. Now, it’s stacking second-life systems. First came a 63 MWh microgrid for Crusoe Energy’s AI data center in Texas, the world’s largest such install at the time (Electrek). GM followed suit last summer, shipping packs for data-center power (TechCrunch). Rivian’s move fits the pattern.
Investors smell opportunity. Redwood pulled in $425 million in a Series E round this year, drawing Google and Nvidia to back its storage pivot (TechCrunch). Earlier, $350 million fueled expansion. Plans call for gigawatt-hours in the pipeline, scaling to 100-megawatt projects.
And the Rivian system? Scalable. It starts at 10 MWh but can grow. Batteries retain health post-vehicle life—often over 70% capacity—making them ideal before full recycling. This defers billions in grid upgrades, per Rivian. No new mines. No fresh cells. Just smart reuse.
But challenges loom. Goldman Sachs trimmed its Rivian price target to $17 from $19, citing R2 production ramps amid Q1 deliveries of 10,365 vehicles—on track for 62,000-67,000 this year. Rivian ditched its 2027 profitability goal to chase autonomy (TechCrunch). Energy savings help. Still, cash burn persists.
Grid Relief in a Bottleneck Era
U.S. energy storage hit nearly 65 gigawatts by year-end, per the Energy Information Administration. Second-life packs could claim half the market as EVs multiply. Rivian’s plant proves the model: Cut peak costs. Bolster reliability. Export excess if needed.
Industry buzz echoes this. “Second-life batteries are moving from theory to industrial use,” noted OneStopESG. X posts from insiders like @SawyerMerritt highlight Redwood’s recycling dominance, while @AlexEdgerton ties it to solar buffering.
Critics fret over battery waste. Wrong. This closes the loop. Rivian’s Normal factory—churning R1s and soon R2s—now runs partly on its own castoffs. Redwood’s Pack Manager ensures safety and dispatchability. Grids win. Manufacturers save. EVs prove their worth beyond wheels.
Expect copycats. GM’s deal. Crusoe’s grid. More factories next. As AI guzzles power and electrification booms, second-life storage isn’t niche. It’s essential. Rivian and Redwood just lit the path.
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