Rivian and Redwood Materials have expanded their battery partnership into a closed-loop system that covers US end-of-life pack recovery, factory scrap recycling and stationary energy storage. The deal builds on an initiative announced in April 2026 to install a 10MWh storage system built from repurposed Rivian packs at the carmaker's Normal, Illinois assembly plant.

Rivian founder and CEO RJ Scaringe framed the arrangement as a grid strategy, not only a waste play. He said: "By partnering with JB [Straubel] and the Redwood team we are turning retired EV batteries into a powerful tool to make the grid more reliable and lower energy costs for everyone."

How will the closed loop work?

Under the expanded arrangement, Redwood will collect retired battery packs from Rivian's service network across the US. Each unit undergoes inspection to determine whether it retains enough capacity for stationary power storage or should be routed directly to recycling.

Units viable for secondary use may be installed at Rivian sites or third-party facilities. In stationary setups, second-life batteries supply power during peak demand, reducing facility strain on local grids. They can also charge during off-peak hours or during surplus renewable output, storing cleaner, lower-cost electricity for later dispatch.

Redwood will additionally handle production scrap from Rivian's manufacturing lines. Materials that cannot be reused pass through a recovery line that, according to the company, extracts more than 95% of key metals — lithium, nickel, cobalt and copper — and returns them to domestic supply chains. That 95% figure is a company claim; it reflects Redwood's stated recovery performance rather than independently audited production data.

Why consolidate under one contract?

By integrating scrap management, retired-pack collection and secondary storage in a single agreement, Rivian aims to simplify its power strategy amid multi-year waits for utility grid interconnections and ongoing equipment backlogs. The interconnection queue problem — the waiting period before a facility can plug new power assets into the utility grid — has pushed several industrial operators toward on-site storage as a faster workaround.

For Redwood, the deal widens the feedstock base for a business founded in 2017 by JB Straubel, the former Tesla chief technology officer. The company manufactures battery components, refines cathode materials (the positively charged electrode side of a lithium-ion cell) and installs grid-scale storage systems for industrial sites and data centres across the US.

Straubel said: "Redwood's unique ability to integrate and redeploy Rivian batteries with our technology is an opportunity to enable fast, flexible and more cost-efficient energy storage."

What is the financial backdrop?

The expanded agreement follows other recent moves by Rivian to shore up its balance sheet. Earlier this month, the company secured a committed $1bn, ten-year term loan facility from Germany's Volkswagen Group.

What to watch next: whether the 10MWh system at Normal reaches commissioning on the April 2026 timeline, how quickly retired-pack volumes from the service network scale into Redwood's recovery lines, and whether the claimed 95% metal extraction rate holds up as scrap volumes grow.