$350M Bet Marks a New Phase for U.S. EV Battery Recycling

Redwood’s October 2025 funding round underscores rising confidence in U.S. battery recycling and grid-scale energy storage

26 Jan 2026

The race to secure America’s EV battery supply chain took a decisive turn in October 2025.

Redwood Materials announced it had raised $350 million in new funding, a vote of confidence in battery recycling as a cornerstone of the U.S. energy transition. As millions of electric vehicles inch closer to retirement, investors are betting that yesterday’s batteries will power tomorrow’s economy.

The round was led by Eclipse, with strategic backing from NVentures, NVIDIA’s venture arm. Redwood says the capital will expand its core recycling operations while accelerating a newer business line focused on energy storage systems for the power grid. The dual push reflects a broader ambition to recover critical materials while helping stabilize an increasingly strained power system.

The timing is deliberate. As EV adoption accelerates, used batteries and manufacturing scrap are expected to become vital sources of lithium, nickel, and cobalt. Recycling them domestically could reduce dependence on overseas supply chains known for volatility, trade tensions, and long shipping routes. Redwood has argued that waiting for shortages to appear would be a costly mistake.

Instead, the company is building capacity ahead of demand. Executives describe the current period as pivotal, marked by tightening global supply and surging U.S. appetite for battery materials. The bet is that early movers will shape standards, lock in partners, and define how the next phase of the industry operates.

What sets this investment apart is its scope. Recycling remains Redwood’s foundation, but grid-scale energy storage is emerging as a second pillar. These systems are designed to smooth out renewable power and meet rising electricity demand, including from data centers supporting artificial intelligence workloads that cannot afford downtime.

The strategy is not without risk. Scaling industrial facilities brings permitting hurdles, operational complexity, and intense competition from other well-funded players. Still, momentum appears to be building across the sector.

For the U.S. EV ecosystem, the message is clear. The battery lifecycle is no longer a footnote. It is becoming a strategic asset, and investors are signaling that the time to build is now.