Rivian and Redwood Materials Partner to Deploy First Second-Life Battery Storage System at US Auto Manufacturing Plant

The collaboration marks a significant milestone in the evolution of the electric vehicle industry, as Rivian and Redwood Materials have officially entered into a partnership to establish a second-life battery energy storage system (BESS) at Rivian’s primary manufacturing facility in Normal, Illinois. This initiative represents the first time a major U.S. automaker has integrated a large-scale energy storage system comprised entirely of repurposed electric vehicle (EV) batteries directly into its production environment. The project aims to enhance the factory’s energy efficiency, reduce operational costs, and provide a sustainable solution for battery packs that have reached the end of their primary life cycle in consumer vehicles.

Under the terms of the agreement, Rivian will supply used battery packs—sourced from warranty returns, engineering test mules, and early high-mileage vehicles—while Redwood Materials will handle the technical integration and management of the system. The initial deployment is slated to feature more than 100 repurposed Rivian battery packs, combined to create a 10-megawatt-hour (MWh) storage system. This "battery buffer" is designed to feed electricity back into the factory’s internal grid during periods of peak demand, effectively stabilizing the facility’s power consumption and reducing the strain on the local utility grid.

Technical Integration and the Redwood Energy Ecosystem

The core of this partnership lies in the sophisticated software and hardware integration provided by Redwood Materials. Founded by Tesla co-founder and former Chief Technology Officer JB Straubel, Redwood has transitioned from a pure-play battery recycler into a comprehensive energy technology firm. The system at the Normal plant will utilize the proprietary Redwood Pack Manager software, a platform specifically engineered to manage packs with varying states of health and different chemical compositions.

In the world of second-life batteries, consistency is a major hurdle. Battery packs from different vehicles often have varying levels of degradation and remaining capacity. Redwood’s software allows these disparate units to function as a single, cohesive, and dispatchable asset. By monitoring the performance of each individual module in real-time, the system ensures safety and optimizes the discharge cycles to maximize the longevity of the second-life application.

This 10 MWh installation is a pilot for what both companies hope will become a scalable model for industrial sites across North America. While the scale is smaller than Redwood’s flagship 63 MWh microgrid in Sparks, Nevada—which powers a data center for Crusoe AI—the Rivian project is distinct because of its direct integration into an active automotive assembly line.

Strategic Benefits for Rivian’s Manufacturing Ramp

The decision to install a large-scale BESS comes at a critical juncture for Rivian. The company is currently undergoing a massive production expansion at its Illinois facility. In addition to the existing R1S SUV and R1T pickup truck lines, Rivian is preparing for the high-volume production of the R2 platform. As production volume increases, so does the facility’s load profile.

Industrial electricity pricing is often heavily influenced by "peak demand charges," which are fees based on the highest amount of power a customer draws during a specific window. By using the 10 MWh system to shave these peaks—a process known as "peak shaving"—Rivian can significantly lower its utility bills. Furthermore, the battery system provides a layer of resilience against grid stress events. In the event of local power fluctuations or brownouts, the BESS can provide a temporary bridge, ensuring that sensitive manufacturing robotics and assembly lines remain operational without interruption.

Rivian CEO RJ Scaringe emphasized the dual role of EVs as both transportation and energy assets. "EVs represent a massive, distributed, and highly competitive energy resource," Scaringe stated. "Our partnership with Redwood enables us to utilize our vehicles’ batteries beyond the life of a vehicle and contribute to grid health and American competitiveness."

Addressing the Battery Lifecycle Challenge

One of the most pressing questions facing the EV industry is the "end-of-life" problem. As the first generation of modern EVs begins to age, millions of battery packs will eventually be removed from vehicles. While these batteries may no longer meet the high-power, high-range requirements of a passenger car, they often retain 70% to 80% of their original capacity.

Historically, the industry has viewed recycling as the primary solution. However, recycling is energy-intensive and involves breaking the battery down into its raw elemental components like lithium, cobalt, and nickel. Repurposing these batteries for stationary storage provides a "middle step" that extends the functional life of the battery by a decade or more before it ultimately needs to be recycled.

For Rivian, this partnership solves a logistical and financial headache. Instead of paying for the immediate recycling of warranty-replaced packs or engineering prototypes, Rivian can now monetize these assets by turning them into a cost-saving tool on its own factory floor. This circular economy approach aligns with the company’s brand identity as a sustainability-focused manufacturer.

JB Straubel’s Vision and Redwood’s Market Position

The partnership further solidifies JB Straubel’s influence on the American energy landscape. Since leaving Tesla in 2019, Straubel has focused on the "backend" of the EV revolution. Redwood Materials has aggressively expanded its capabilities, raising $350 million in late 2025 specifically to scale its energy storage division.

Straubel has long argued that the traditional electrical grid is unprepared for the rapid transition to electric transport and artificial intelligence. "Electricity demand is accelerating faster than the grid can expand, posing a constraint on industrial growth," Straubel noted during the announcement. "At the same time, the massive amount of domestic battery assets already in the U.S. market represents a strategic energy resource."

Redwood’s strategy involves building a "closed-loop" supply chain where batteries are manufactured, used in vehicles, repurposed for the grid, and finally recycled to make new batteries. The Rivian deal is part of a growing portfolio of automotive partnerships for Redwood, which recently signed a memorandum of understanding (MOU) with General Motors to explore similar second-life applications for GM’s Ultium battery platform.

Data and Market Context: The Scaling of Energy Storage

The scale of the energy storage opportunity in the United States is immense. According to industry forecasts, the U.S. will require more than 600 GWh of stationary energy storage by 2030 to accommodate the growth of renewable energy and the increased load from EVs and AI data centers. To put that in perspective, 600 GWh is equivalent to the total energy output of the Hoover Dam running at full capacity for approximately two months.

While companies like Tesla have dominated the "first-life" storage market with the Megapack—which uses brand-new battery cells—Redwood is carving out a niche in the "second-life" market. By using existing assets, Redwood can potentially offer storage solutions at a lower capital cost than systems requiring new mining and cell manufacturing.

Chronology of Redwood Materials’ Growth in Energy Storage:

• 2017: Redwood Materials founded by JB Straubel with a focus on electronic waste and battery recycling.
• 2019: Straubel exits Tesla to lead Redwood full-time.
• 2021-2023: Redwood secures major recycling partnerships with Ford, Toyota, and Volkswagen.
• Mid-2025: Redwood Energy division is launched to focus on stationary BESS.
• July 2025: Redwood signs an MOU with General Motors for second-life battery repurposing.
• October 2025: Redwood raises $350 million in new funding to scale domestic energy storage production.
• Present: Rivian and Redwood announce the 10 MWh deployment in Normal, Illinois.

Broader Implications for the Automotive Industry

The Rivian-Redwood project serves as a pilot that other manufacturers are likely to watch closely. If successful, it proves that an auto plant can function as its own microgrid, using its own defective or aged products to subsidize its energy costs. This could lead to a shift in how automakers design battery packs, potentially prioritizing "repurposability" to ensure that packs can be easily extracted and stacked into storage containers.

Furthermore, this move strengthens the argument for domestic battery production and processing. By keeping the entire lifecycle of the battery within the United States—from manufacturing in Illinois to repurposing and eventual recycling—Rivian and Redwood are reducing their reliance on foreign supply chains and volatile raw material markets.

As the 10 MWh system begins its initial operations in Normal, the industry will be looking for data on its reliability and the actual cost savings achieved through peak shaving. If the economics prove favorable, the modest 10 MWh installation could quickly grow into a gigawatt-hour scale asset, mirroring the massive growth seen in the electric vehicle market itself. For now, the partnership stands as a practical application of the circular economy, proving that the "waste" of the EV industry may actually be one of its most valuable resources for the future of the power grid.