Investors Spot the Next Clean Energy Power Move

Investment and federal backing accelerate US battery recycling as EVs and energy storage drive demand for domestic materials

9 Feb 2026

A surge of investment is accelerating the expansion of the US battery recycling industry, underlining its growing importance in securing materials for electric vehicles and energy storage as the country seeks to strengthen domestic supply chains.

In October 2025, Redwood Materials, a US battery recycling group, raised $350mn in a Series E funding round led by Eclipse Ventures, with participation from Nvidia’s NVentures. The company said the capital would be used to scale recycling operations across the US and support expansion into large-scale energy storage systems. The deal is one of several recent investments pointing to rising strategic interest in the sector.

Recycling is increasingly viewed as infrastructure rather than a downstream sustainability measure. As demand for batteries rises across transport, power networks and digital infrastructure such as data centres, recovering materials from used batteries is becoming central to supply security and cost control.

The shift is driven by access to critical minerals including lithium, nickel and cobalt, which remain essential to current battery technologies and are still largely imported. Recycling these materials from end-of-life batteries and manufacturing scrap can reduce exposure to foreign supply chains, lower emissions and help limit price volatility that has long affected battery makers.

Growth in energy storage is adding momentum. Rising electricity demand from electric vehicles and data-intensive technologies is increasing the need for grid-scale storage. Recycled batteries offer a way to meet part of this demand while extending the economic life of existing materials and linking transport, energy and technology supply chains more closely.

However, constraints remain. Much of the feedstock for US recyclers still comes from manufacturing waste rather than retired electric vehicle batteries, though volumes of end-of-life packs are expected to rise over the next decade. Companies must also navigate regulations governing the transport and handling of used batteries as capacity expands.

Federal policy is reinforcing private investment. The US Department of Energy and other agencies have allocated funding to several battery recycling and materials recovery projects, signalling long-term government support for domestic capacity.

Together, these trends are positioning battery recycling as a core component of the US energy economy. For automakers, utilities and technology companies, closer ties with recyclers are becoming increasingly important as clean energy deployment accelerates.