JB Straubel, Tesla’s co-founder and longtime chief technology officer before he left the company in 2019, has spent the years since building Redwood Materials into one of the most closely watched battery-recycling companies in the U.S. In 2025, Straubel pushed the company into a genuinely new business: Redwood Energy, a unit that takes retired electric vehicle battery packs — cells with too little remaining capacity for a car but still plenty of life left for a stationary application — and repurposes them into grid-scale energy storage systems, including systems explicitly built to serve power-hungry AI data centers and industrial facilities. It is a direct bet that the fastest-growing source of electricity demand in the U.S. right now is not electric vehicles at all, but the data centers powering the AI buildout, and that Redwood’s existing battery supply chain gives it an unusual cost advantage in meeting that demand.
$425 Million to Scale the Pivot
Redwood closed its Series E funding round at $425 million in January 2026, following an initial $350 million tranche announced in October 2025, pushing the company’s valuation to roughly $6 billion. Straubel has said the capital will go toward expanding energy storage deployments, growing Redwood’s materials refining and production capacity, and building out its engineering and operations teams — a clear statement that the storage pivot is now central to the company’s growth plan, not a side experiment layered onto its original recycling business. Redwood also holds a conditional commitment for a $2 billion loan from the U.S. Department of Energy, underscoring how directly the company’s roadmap is now tied to U.S. domestic battery-supply-chain policy.
Real Customers, Not Just a Roadmap
The pivot has already produced concrete commercial partnerships. In April 2026, Redwood and Rivian announced an energy storage partnership at Rivian’s EV manufacturing plant in Normal, Illinois, deploying more than 100 used Rivian battery packs into a 10 megawatt-hour storage system — a direct demonstration of Straubel’s thesis that a car company’s own retired batteries can become dispatchable grid capacity supporting that same company’s manufacturing operations. Two months later, in June 2026, General Motors became the first automaker to partner with Redwood across the full battery lifecycle, from end-of-life collection through materials recovery to second-life energy storage — a significantly broader commitment than a single-site deployment, and one that gives Redwood a foothold with one of the largest EV makers in the U.S.
A Familiar Face Joins as CFO
Straubel also brought in Deepak Ahuja, Tesla’s former chief financial officer, as Redwood’s new CFO in May 2026 — a hire that reunites two executives who worked together through some of Tesla’s most difficult and most consequential financial periods, and one that signals Redwood is preparing its finance function for the scale and scrutiny that come with multi-hundred-million-dollar funding rounds and government-backed loan commitments.
A 10% Workforce Cut Alongside the Growth Story
The pivot has not been without cost. In April 2026, Redwood laid off roughly 10% of its workforce even as it announced the energy storage pivot, a move the company tied to sharpening its focus on the higher-growth storage business rather than spreading resources evenly across every part of its operations. The combination — cutting staff while simultaneously closing a $425 million round and landing major automaker partnerships — reflects a company reallocating aggressively toward what it sees as its biggest opportunity, rather than one in broad financial distress.
What This Means for Philippine Founders
Straubel’s pivot from pure battery recycling to AI-data-center-serving energy storage is a sharp example of a founder redirecting an existing physical-infrastructure asset toward wherever real demand is actually concentrated — a pattern worth studying for any Philippine founder in energy, waste management, or materials recovery, since the Philippines faces its own approaching wave of retired EV and e-bike batteries with no clear domestic second-life or recycling pathway yet built. The Rivian and GM partnerships also illustrate a specific go-to-market lesson: Redwood didn’t have to build demand from scratch, it built a product that let existing large industrial partners solve their own real operational problems (grid strain at a manufacturing plant, end-of-life fleet management) — exactly the kind of practical, partner-anchored entry point a resource-constrained Philippine climate-tech or circular-economy startup should look for before attempting to build broad market demand on its own.
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