GM and Redwood Target Battery Storage for Data Centres

General Motors (GM) and Redwood Materials have signed a memorandum of understanding to accelerate the deployment of energy storage systems using GM’s US-manufactured battery cells and second-life battery packs from electric vehicles. 

With AI data centres increasing pressure on the power grid, the partnership is focused on building scalable storage infrastructure to support both capacity and resilience.

The agreement builds on an existing relationship between the two companies and reflects a broader industry move to extend the value chain of electric vehicle (EV) batteries. 

Under the memorandum, GM’s new and reused battery systems will be integrated into energy storage products developed by Redwood Materials, targeting large-scale applications such as backup power and peak load management in critical facilities.

AI energy demand drives new storage strategy

Kurt Kelty, Vice President of Batteries, Propulsion and Sustainability at GM, outlines the importance of battery-based storage in addressing rising energy needs across sectors. 

“The market for grid-scale batteries and backup power isn’t just expanding, it’s becoming essential infrastructure,” says Kurt. “Electricity demand is climbing, and it’s only going to accelerate. 

“To meet that challenge, the US needs energy storage solutions that can be deployed quickly, economically and made right here at home. GM batteries can play an integral role. We’re not just making better cars – we’re shaping the future of energy resilience.”

In June 2025, Redwood Materials launched a new business line, Redwood Energy, focused on deploying both new and second-life battery modules into low-cost energy storage systems. 

These systems are aimed at supporting power-hungry infrastructure, with a particular focus on AI data centres — a sector where electricity usage is expected to triple from 4.4% of the US total in 2023 to 12% by 2028.

JB Straubel, Founder and CEO of Redwood Materials, says: “Electricity demand is accelerating at an unprecedented pace, driven by AI and the rapid electrification of everything from transportation to industry.

“Both GM’s second-life EV batteries and new batteries can be deployed in Redwood’s energy storage systems, delivering fast, flexible power solutions and strengthening America’s energy and manufacturing independence.”

Data centre application already underway

The partnership is already producing tangible results. GM’s second-life EV batteries are currently being repurposed at Redwood’s 12MW/63MWh installation in Sparks, Nevada. The site supports a microgrid designed for Crusoe, an infrastructure company focused on AI. 

According to the companies, this is the largest second-life battery development globally and the largest microgrid in North America.

The facility demonstrates how repurposed EV batteries can serve high-load environments while reducing the demand for new battery manufacturing.

These energy storage systems can store excess energy during off-peak hours and discharge when demand spikes or when data centres face outages, supporting uptime and energy efficiency goals.

The modular approach used in Redwood’s designs allows second-life batteries to be integrated alongside new cells, giving data centre operators and other customers flexibility in deployment. 

The systems are manufactured and assembled in the US, aligning with broader government and industry goals to secure domestic energy and supply chain independence.

Preparing for surging demand across critical infrastructure

The GM-Redwood collaboration reflects a growing focus on how battery technologies can extend beyond EVs into long-duration grid support, particularly as AI and cloud workloads continue to grow. 

With data centre operators facing pressure to balance uptime with grid stress, on-site energy storage offers a way to reduce demand volatility and provide backup power without relying solely on fossil fuel generators.

GM and Redwood Materials are expected to announce further details about their roadmap later in 2025, including timelines, deployment volumes and additional infrastructure partners.