EV batteries usually last longer than the car: Now they are being re-used to power the grid

US-based electric car maker Rivian has teamed up with battery technology company Redwood to deploy one of the biggest grid-scale batteries yet to be delivered in the US with second-life EV batteries, and it’s being heralded as a major flex point for the industry.

Rivian and Redwood announced their partnership late last week, and said it will initially involved the use of 100 second-life Rivian batteries to provide 10 megawatt-hours (MWh) of grid-scale storage at its Illinois manufacturing plant to reduce costs and load during peak demand periods.

The two companies say the system is rapidly scalable and offers significant cost benefits, not only by using safe and proven EV batteries but also because it can deliver faster, more flexible deployment of energy capacity directly at high-demand sites like manufacturing facilities.

JB Straubel, the former long-time chief technology officer at Tesla who founded and led Redwood Materials, said there is a massive amount of domestic battery assets already in the US which are a strategic and readily deployable energy resource.

He notes that batteries are often the longest-lived part of the vehicle itself, and are designed to last many hundreds of thousands of kilometres and, in many cases, to remain healthy even when the vehicle is retired.

“They are extremely valuable as stationary energy storage devices,” he said. “This is a scalable model for how we add meaningful energy capacity in the near term.”

Redwood last June created a new division specifically focused on second life EV batteries, and signed an MoU with US car giant GM to deploy used EV packs and new modules into fast, low-cost energy-storage systems needed to meet surging power demand from AI data centers and other applications.

Redwood is already using GM second-life electric vehicle batteries to help power the Redwood’s 12MW/63MWh installation in Sparks, Nevada, supporting the AI infrastructure company Crusoe. It describes this as the largest second-life battery development in the world and the largest microgrid in North America.

Rivian Founder and CEO RJ Scaringe says stationary energy storage technologies play a key role in reducing cost and increasing stability both for the customer and the grid at large.

“For example, during periods of peak demand like heat waves, Rivian can instantly deploy energy stored in its second-life batteries to offset increased strain on the grid, avoiding having to purchase more expensive electricity while also avoiding additional load on the power system,” he said.

The conversion of used EV batteries into grid scale storage is not entirely new, as it has been used in Japan with second-life Nissan Leaf batteries in small quantities. But the Rivian-Redwood move caught the attention of Morgan Stanley analysts, who say it is potentially significant for all EV makers.

“The ability for EV OEMs (car makers) to monetise batteries that would otherwise be discarded introduces a potential new revenue stream beyond the initial vehicle sale and could further improve ESS unit economics,” the Morgan Stanley analysts wrote in a report.

“This becomes a particularly powerful flywheel as the EV car parc matures. As the EV car parc ages, repurposing still-viable batteries and battery materials for applications such as energy storage could improve the economics of both EV and ESS manufacturing.”

There are challenges. Iola Hughes, a battery specialist from Benchmark Market Intelligence, says the biggest issue is ensuring the various EV batteries can work together.

“It’s definitely got some potential,” Hughes says in the latest episode of the weekly Energy Insiders podcast published by The Driven’s sister site, Renew Economy.

“In some cases, it might make more sense to recall. There is obviously some risk involved with using old EV batteries that have been cycled in all sorts of different ways and putting them all together and getting it to work as a unified system.”