Key takeaways:

• General Motors (GM) and Redwood Materials have signed a non-binding MoU to develop energy storage systems (ESSs) using both new US-manufactured batteries and second-life EV battery packs, aiming to accelerate deployment and enhance energy resilience.
• With electricity demand surging due to AI and electrification, GM and Redwood Materials emphasize the importance of fast, economical and domestically produced energy storage solutions to meet growing infrastructure needs.
• Despite battery storage accounting for only 2% of US utility-scale electricity capacity in 2024, the sector is poised for record growth in 2025, with plans to add 19.6 GW of utility-scale battery storage to the grid.

Accelerating deployment of recycled battery ESSs

The non-binding memorandum of understanding (MoU) is meant to accelerate deployment of ESSs using both new US-manufactured batteries from GM and second-life battery packs from GM electric vehicles (EVs), according to press releases from both companies.

Addressing growing demand for recycled battery ESSs

“The market for grid-scale batteries and backup power isn’t just expanding, it’s becoming essential infrastructure,” GM’s vice president of batteries, propulsion and sustainability Kurt Kelty said.

“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,” Kelty added.

Strengthening industry collaboration around recycled battery ESSs

This is the second agreement between the two companies. And follows their announcement in May this year that they would collaborate on recycling scrap from GM’s facilities in Warren, Ohio and Spring Hill, Tennessee.

GM’s Warren, Ohio, facility is home to Ultium Cells, a joint venture between GM and the South Korean battery-maker LG Energy Solutions. The facility, which began initial cell production in August 2022, supplies battery cells to various GM facilities throughout North America.

GM builds both internal combustion and electric vehicles and has a battery assembly line in Spring Hill, Tennessee.

Redwood Materials’ role in advancing recycled battery ESSs

“Electricity demand is accelerating at an unprecedented pace, driven by [artificial intelligence (AI)] and the rapid electrification of everything from transportation to industry,” JB Straubel, founder and chief executive officer of Redwood Materials, said.

“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,” he added.

In June, Redwood Materials launched Redwood Energy, which aims to deploy both new battery modules and used EV battery packs into low-cost ESSs to meet surging power demand from AI data centers and other applications.

“The memorandum announced today enables Redwood to pair that integration expertise with both second-life GM EV packs and new US-built batteries, delivering a domestic solution from cell to system,” according to the companies.

Future opportunities for expansion in recycled battery ESSs

Analysts and industry participants agree that, while the repeal of 30D credits and time limits set on 45X credits under the One Big Beautiful Bill (OBBB) could affect EV demand, demand for ESSs has been growing thanks to the increasing need for AI datacenters.

According to a 2025 report by the US Energy Information Administration (EIA), despite fast growth in the sector, battery storage made up only 2% of the 1,230 GW of utility-scale electricity generating capacity in the US in 2024.

“In 2025, capacity growth from battery storage could set a record as operators report plans to add 19.6 GW of utility-scale battery storage to the grid,” according to the EIA.