GM inks deal to recycle EV batteries to power AI

Yahoo

16-07-2025

Used batteries from General Motors vehicles may soon power artificial intelligence centers.
The Detroit automaker signed a 'non-binding memorandum of understanding' to deploy new and used electric vehicle batteries for storage systems that power a Nevada microgrid, which, in turn, powers a modular data center for AI infrastructure company Crusoe, the company said July 16.
GM defines the terms of the deal as a business plan in place that outlines the automaker's intentions to work together moving forward on the deployment of energy storage systems meant to strengthen American grid resiliency.
This expands on an existing partnership with Redwood Materials, which the companies announced in May 2024 to recycle production scrap from two Ultium Cells battery plants, in Warren, Ohio, and Spring Hill, Tennessee. Ultium Cells is the joint battery cell manufacturing venture between GM and LG Energy Solution.
These GM EV batteries are already powering Redwood's microgrid in Nevada supporting AI infrastructure company Crusoe. That installation can deliver 12 megawatts of power at any instant, and the total capacity of the site is 63-megawatt hours, GM said.
'The market for grid-scale batteries and backup power isn't just expanding, it's becoming essential infrastructure,' said Kurt Kelty, vice president of batteries, propulsion and sustainability at GM. 'Electricity demand is climbing, and it's only going to accelerate. To meet that challenge, the U.S. needs energy storage solutions that can be deployed quickly, economically, and made right here at home. GM batteries can play an integral role.'
The business of recycling batteries
The news comes on the heels of several announcements GM has made regarding investment in electric vehicle propulsion. Earlier this week, GM and LG said they would scale production of lithium iron phosphate battery cells, a lower-cost alternative to the nickel-rich batteries the companies also produce together, at their Ultium facility in Tennessee.
Redwood Materials, founded and run by former Tesla chief technology officer JB Straubel, also partners with Toyota Motor Co., Ford Motor Co., Volvo, Volkswagen and Audi to extract lithium, nickel, and cobalt from 'end-of-life' battery packs. Redwood Materials then remanufactures those materials into cathodes, according to its website.
'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,' Straubel said in a statement.
GM's contract with Redwood allows it to enter a new business much like its partner LG Energy Solution in the race to build batteries that support the U.S. electric grid and fuel the growing demand of artificial intelligence.
The South Korean battery maker, the largest in the country, completed expansion of its Holland, Michigan, facility last month after investing over $1.4 billion to manufacture batteries for storage systems.
The plant, operational since 2012, also produces automotive vehicle batteries for partners, including General Motors, Honda and Hyundai Motors.
Still, the collaboration with Redwood Materials to deploy energy storage systems does not put it in direct competition with its joint venture partner. Rather, the expansion requires using new GM-manufactured battery packs made from cells from Ultium Cells JV with LG Energy Solution, and second-life GM EV batteries with Redwood Materials integrating GM battery technology into battery energy storage systems, according to a company spokesman.
Striking a deal
Partnerships between automakers and battery recyclers are a growing trend in North America, but are still in their infancy and it remains to be seen how well the business model will work, according to Tony Flanagan, a partner and managing direction in the automotive and industrial practice at AlixPartners.
The investment required to get a battery recycling operation up and running is substantial, and the revenue stream for U.S. automakers is difficult to project due to the mercurial changes facing the EV environment in North America.
'Europe and China seem to have better business models for these partnerships as we see the global supply of EV batteries for recycling on track to take off in 2028, driven largely by growth' outside the United States, he said, adding that battery recycling capacity is on track to be about three times what it is today by 2030, with China representing approximately 70% of the market and the U.S. just 10%.
The U.S. Department of Energy said last December in its 2024 Report on U.S. Data Center Energy Use that data center load growth tripled over the past decade and is projected to double or triple again by 2028. Meanwhile, Redwood Materials anticipates more than 100,000 EVs will require recycling by the end of 2025.
The lifespan of an EV battery
Just because a battery is no longer useful in an electric vehicle does not mean it's useless, according to Liz Najman, director of market insights at EV research firm and shopping resource Recurrent. In 2025, the new electric vehicle will produce batteries with an average of 93 kilowatts of charge.
Depending on the manufacturer, a battery is considered end-of-life in an electric vehicle, when around 70 kilowatt hours remain.
'When you lose that 30% in battery capacity, you lose around 30%, plus or minus, of range. For a lot of people, that's no longer satisfactory,' she told the Free Press. 'You're not just losing the capacity of the battery; you're losing the rate of energy delivery ― which is power.'
Even for vehicles on the road for over five years, decommissioned electric vehicle batteries could last another 10 to 20 years before officially expiring ― but the technology hasn't been around long enough to specify accurate lifespans, Najman said.
Microgrids like the one GM EV batteries will power are more resilient and cost-effective than a traditional energy grid, Najman said, and are exempt from the processes of a state-regulated utility.
'We don't actually know ― modern lithium-ion batteries have not been around and in use for that long,' she said. 'We don't know how long these vehicle batteries will continue to be useful, but it's longer than people expect.'
Jackie Charniga covers General Motors for the Free Press. Reach her at [e-mail].
This article originally appeared on Detroit Free Press: GM inks deal to recycle EV batteries to power AI