Why Old EV Batteries Are Powering a New US Industry

Redwood leads US efforts in second life battery reuse as recyclers test data driven tools and early automation for diagnostics and preprocessing

10 Dec 2025

A gradual shift is taking place in the US battery industry as companies refine how electric vehicle packs are collected, assessed and prepared for reuse or recycling. Rising volumes of end-of-life batteries are prompting wider adoption of data-driven methods to judge condition and direct units to the most suitable next step.

Second-life applications are drawing particular attention. Redwood Materials, which processes more than 20GWh of used lithium-ion batteries each year, has launched Redwood Energy to convert qualifying packs into storage systems for microgrids and data-centre projects. The company says many batteries arriving at its facilities still hold significant capacity, making them viable for a period of reuse before they are recycled for materials.

Redwood’s move reflects a broader trend. Other companies are testing similar routes, although large-scale deployment remains limited as the industry works to standardise testing methods and improve analytics for assessing state of health. Analysts say stronger datasets and more consistent pack characterisation could raise value recovery and ease pressure on supplies of critical minerals.

Recycling groups are also studying selective automation for sorting, preprocessing and diagnostic tasks. These projects remain narrow in scope. Fully automated disassembly of EV packs is still in the research phase, but incremental steps could improve safety and throughput as facilities expand.

With investment increasing and reuse pathways developing, the US battery sector is moving toward a more circular model. Companies that combine accurate diagnostics with responsible materials recovery and targeted automation may gain an early advantage as the market grows.

As more EV batteries reach the end of their first life, competition to capture remaining value is intensifying and is likely to shape the direction of US energy technology in the coming decade.