The rush to find ways to power artificial intelligence data centers is even luring automakers with battery production capacity to spare.
Last month, General Motors, the largest automaker in the United States, announced it has entered into an agreement with Redwood Materials to develop grid-scale energy storage using some of the new and repurposed batteries originally meant for its electric vehicles. Per the agreement, which is a non-binding memorandum of understanding, Redwood will use GM’s batteries to build hybrid storage solutions for AI data centers through its new platform Redwood Energy.
This is an approach that GM’s European and Asian counterparts have already explored. For instance, French automaker Renault’s Advanced Battery Storage is a stationary energy battery storage project using EV batteries with two installations in France and Germany. And in Texas, Nissan’s EV batteries are being repurposed for grid energy storage by California company B2U Storage Solutions.
But those projects haven’t been linked to the needs of data centers; rather, they’ve focused on balancing renewables, often in collaboration with utilities. And for the most part, they’re using repurposed batteries, while GM’s deal with Redwood includes both new and second-life battery packs.
On GM’s most recent earnings call, however, CEO Mary Barra described the move as an extension of the company’s existing battery work; GM’s “expertise in leading cell chemistries and formats is… creating new business opportunities,” she said. (The company announced in May that it plans to mass produce batteries with a new lithium-manganese-rich chemistry starting in 2028.)
Specifically, GM finds itself with far more battery cell production capacity than demand for electric vehicles. The automaker has the ability to churn out battery cells for up to 800,000 EVs annually, but it only sold a little over 100,000 in the first six months of 2025, including the ones it produced for Honda Motor, according to reporting by the Detroit Free Press. Sales represent an improvement compared to previous years, but it’s still unlikely that GM’s EV sales will match its battery cells’ capacity anytime soon.
This is especially true given the Trump administration’s posture on EVs. Earlier this summer, BNEF predicted that, between 2025 and 2030, the U.S. would see 14 million fewer cumulative EV sales than previously estimated, due to policy changes such as the roll-back of federal fuel-economy standards and the phase-out of the EV tax credit.
But Trump loves data centers. In the U.S., load growth from data centers is projected to triple by the end of the decade. This comes with a growing appetite for supporting power infrastructure, including energy storage. According to some, the AI boom, combined with the increasing penetration of renewables, have started a “supercycle of investment” in battery storage systems that could top $1 trillion globally over the next 10 years.
It stands to reason then that automakers like GM, which have spent years developing their storage capabilities and don’t want to have underutilized capacity, would want to capitalize on this boom. Tesla has already demonstrated the benefits of parallel EV and battery storage operations on the side (though, of course, Tesla’s EV batteries and PowerWalls are two different lithium-ion-based systems). In 2024, during a slowdown in EV sales, Tesla’s storage deployment jumped 158% year over year, doubling the company’s revenue for that part of the business.
It’s too soon to know if GM’s peers are also considering using their EV batteries for energy storage — none have publicly referenced the opportunity — but interest is certainly growing in the market more broadly.
Redwood Materials has already put repurposed GM EV batteries to test in a 12-megawatt microgrid in Nevada, which supports a first-of-a-kind, off-grid modular data center for AI workloads operated by Crusoe. The data center uses two Crusoe Spark units with Nvidia A100s and B200s, and is powered by a 20-acre solar array. According to Crusoe, it represents the largest solar-powered, off-grid data center in the world — and the world’s largest installation of second life batteries.
The unveiling of the project in June, which came alongside the unveiling of Redwood’s second-life grid storage division Redwood Energy, marked a significant shift in strategy for the company, which had previously only focused on battery recycling and materials production.
