Introduction: Turning old EV batteries into data center powerhouses

As electric vehicles (EVs) have matured from early adopters to mainstream options, their battery packs are quietly reaching the end of their useful life in automobiles. Most EV batteries still retain 60–80 % of their original capacity when they are retired from cars, making them an underutilized resource. Instead of sending those packs straight to recycling, some companies are finding ways to repurpose them for stationary storage. In July 2025, General Motors and Redwood Materials announced a partnership to give GM’s used EV batteries a “second life” powering energy-hungry data centers and grid‑scale installations. The venture promises to extend the value chain for lithium‑ion packs, create new revenue streams, and address growing energy needs for artificial intelligence (AI) and cloud computing.

Understanding second‑life batteries and why they matter

Second‑life batteries are lithium‑ion packs removed from EVs but still usable in stationary applications. When a battery’s capacity falls below about 70 % of its original rating, its driving range and charge time can degrade enough that drivers notice. For heavy‑use ride‑hail or delivery vehicles, a capacity drop may be even more limiting. Yet a pack with 65 % remaining energy can still provide years of stable storage for buildings or micro‑grids. Repurposing these packs delays recycling and reduces the need to extract new lithium, nickel and cobalt from mines, which has environmental benefits.

The second‑life concept offers several advantages:

• Cost efficiency: Reusing packs cuts capital costs compared with new batteries. Data center operators can buy energy storage at lower prices because the cells have already been depreciated in vehicles.
• Carbon footprint reduction: By extending pack life, companies can amortize the embodied carbon across multiple applications, reducing the overall footprint per kWh delivered.
• Resource optimization: Remanufacturing packs delays recycling, allowing battery components to be used more than once before being broken down into raw materials.
• Grid benefits: Second‑life storage can smooth fluctuations from renewable sources, provide backup power and reduce strain during peak demand.

GM and Redwood Materials: A partnership built on sustainability

Redwood Materials, founded by Tesla co‑founder J.B. Straubel, has become a leading player in battery recycling and closed‑loop supply chains. The company operates a battery‑recycling facility in Nevada and has partnerships with Ford, Volvo and other automakers. Redwood recovers metals like nickel, copper, lithium and cobalt and feeds them back into new battery production.

General Motors has ambitious plans to build millions of EVs by the late 2020s. This strategy will generate a steady stream of used batteries as the first wave of Bolt EVs and Cadillac Lyriq models reach the end of their automotive life cycles. By partnering with Redwood, GM aims to avoid sending these packs directly to scrap and to capture value in a growing stationary‑storage market. According to Redwood, the process involves testing used modules, combining them into larger battery packs, adding control systems and repackaging them into containerized units for data‑center use.

Why data centers are hungry for battery storage

AI applications, streaming services and cloud computing are driving exponential growth in data center energy consumption. Hyperscale facilities require 24/7 uptime and can consume tens or hundreds of megawatts. Many operators run diesel generators or natural‑gas turbines to provide backup power. These fossil‑fuel systems come with carbon emissions, maintenance costs and regulatory scrutiny. Batteries paired with renewable energy can replace or supplement fossil‑fuel backup, provide uninterruptible power during grid outages and allow data centers to participate in demand‑response programs.

Redwood and GM believe that second‑life batteries are well suited for these applications. Data centers require large banks of energy storage to ride through short‑term outages and to shift loads away from grid peaks. Because second‑life packs have lower energy density and cycle life than new cells, they’re better suited for stationary applications where space is less constrained and where charge/discharge cycles are more predictable.

The technology: from pack removal to data‑center deployment

Repurposing EV batteries isn’t as simple as plugging used modules into a server rack. Redwood and GM follow a multi‑step process:

1. Collection and assessment: Batteries arriving from dealers or end‑of‑life vehicles are logged, tested for state of health, and graded. Modules with serious defects are recycled directly.
2. Disassembly and refurbishment: Technicians disassemble packs and replace failed cells. They replace thermal management components if needed and then reassemble modules.
3. Integration and control: The refurbished modules are packaged into standardized racks with battery‑management systems (BMS). Redwood adds control hardware and software that interfaces with data center power systems, enabling features like peak shaving and frequency regulation.
4. Certification and warranty: Before deployment, each pack must meet safety and performance standards. Redwood and GM provide warranties to operators, ensuring reliability for a certain number of cycles or years.
5. Deployment and monitoring: Once installed at a data center, the packs are connected to controllers that monitor voltage, temperature and state of charge. Remote monitoring ensures early detection of issues and optimized performance.

This technical pipeline ensures that used modules can safely operate in a stationary environment, with minimal risk of thermal runaway or unexpected degradation.

Economics and market potential

Data centers spend millions on backup power systems and grid charges. According to analysts, a 50 MW data center might invest $30 million or more in diesel generators and uninterruptible power supplies over its lifetime. Battery storage can reduce fuel consumption, generator wear and utility fees by shifting loads and participating in grid services. Second‑life batteries are typically 30–70 % cheaper than new storage systems on a per‑kWh basis, depending on remaining capacity and warranties.

Redwood and GM did not publicly disclose contract values, but industry observers estimate that global demand for data‑center battery storage could exceed 15 GWh by 2030. If even a fraction of that demand is met with second‑life packs, it could create a multi‑billion‑dollar market. Redwood’s closed‑loop system ensures the packs are recycled at end of second life, feeding materials back into EV battery production and further reducing costs.

Implications for EV owners and the broader market

The partnership has several implications for consumers and the EV ecosystem:

• Higher residual values: Knowing that retired packs have value could boost residual values for EVs. Automakers and leasing companies may offer better trade‑in terms because they can monetize the battery pack in a second‑life application.
• Reduced environmental impact: By extending battery life, the industry can defer mining and reduce the amount of waste produced. Consumers who care about sustainability may see second‑life applications as another reason to choose an EV.
• Supply chain flexibility: By reclaiming materials from used packs and feeding them back into new cell production, automakers can reduce reliance on volatile commodity markets. That could stabilize battery costs over the long term.
• Regulatory compliance: Governments are beginning to require automakers to manage battery end‑of‑life responsibly. Partnerships like this help manufacturers meet extended producer responsibility (EPR) regulations and avoid penalties.

Challenges: logistics, standardization and safety

Second‑life programs are still relatively new, and they face hurdles:

• Logistics: Collecting used packs from hundreds of dealers and service centers, transporting them safely and storing them until testing can be complex and costly.
• Standardization: EV packs vary widely by manufacturer, model and model year. Standardizing modules and connectors for second‑life use is a challenge that requires collaboration across the industry.
• Safety: Used batteries can pose fire risks if not handled properly. Thermal management systems must remain functional, and appropriate monitoring is essential.
• Warranty concerns: Data center operators need assurances that second‑life packs will deliver expected performance. Clear warranties and service agreements are critical to adoption.

How GM and Redwood plan to address these challenges

GM and Redwood are leveraging existing infrastructure to streamline logistics. GM’s dealer network will act as a collection hub, and the company’s battery‑recycling agreements will ensure efficient transportation. Redwood is developing modular form factors and universal rack systems that can accommodate cells from multiple vehicle platforms. The company also plans to work with standards organizations to develop best practices for second‑life applications.

On the safety front, both companies emphasize rigorous testing and monitoring. Redwood’s BMS software monitors each module’s voltage and temperature in real time. If a pack deviates from normal parameters, the system can isolate the module and alert technicians. GM will incorporate these insights into the design of new EV packs, making them easier to disassemble and reuse in the future.

Broader industry landscape: competition and cooperation

Redwood and GM are not alone in exploring second‑life storage. Nissan pioneered the concept with its Leaf batteries, forming the 4R Energy joint venture in Japan to repurpose packs. Tesla sells Powerwall and Megapack units built from new cells but has also explored second‑life uses. BMW, Renault and Audi have their own trials, partnering with utilities and energy companies to deploy retired EV batteries in buildings and micro‑grids. Some energy‑storage developers are building platforms that can integrate packs from multiple OEMs and manage them through software.

Industry collaboration will be critical to scale. If automakers agree on common pack designs or standard interfaces, second‑life reuse becomes easier. Governments may incentivize such standardization through regulation or procurement guidelines. At the same time, companies like Redwood may differentiate themselves through proprietary recycling processes, supply agreements and software platforms.

Policy and regulatory considerations

Several policy trends influence second‑life deployment:

• Extended producer responsibility (EPR): Jurisdictions like the European Union require manufacturers to take responsibility for batteries through recycling or reuse. This encourages automakers to build partnerships like GM–Redwood.
• Incentives for energy storage: Many governments offer tax credits, grants or feed‑in tariffs for storage projects. If second‑life packs qualify, they may become even more economically attractive.
• Data‑center sustainability mandates: Cloud providers face pressure from customers and regulators to reduce emissions. Using second‑life batteries paired with renewables could help meet environmental, social and governance (ESG) goals.

What this means for the future of EV batteries

The GM–Redwood partnership represents a step toward a circular economy for EV batteries. Rather than following a linear path from mine to car to scrap, lithium‑ion packs will loop through multiple life stages. This reduces material demand, lowers the cost of energy storage, and provides a cleaner alternative to fossil‑fuel backup systems. If similar partnerships proliferate, second‑life storage could become a standard feature of data centers, warehouses and solar farms worldwide.

For consumers, the initiative underscores the long‑term value of EV technology. Buying an electric vehicle not only reduces tailpipe emissions during ownership but also contributes to a battery supply chain that stays in use for decades. As battery technology improves, the next generation of packs may be designed with second‑life reuse in mind, including modular construction, swappable components and integrated tracking.

Conclusion: a smart way to power AI and sustain the EV boom

Energy demand from data centers is poised to soar as AI, machine learning and immersive digital experiences grow. At the same time, millions of EVs will enter retirement over the next decade, releasing a tidal wave of lithium‑ion packs. By connecting these trends, General Motors and Redwood Materials are forging a sustainable pathway that benefits both industries. Second‑life batteries extend the usefulness of EV packs, cut carbon emissions, lower costs and open new revenue streams. As more automakers and recyclers join forces, expect to see used EV batteries humming quietly in the background, keeping servers online and the lights on in our digital world.