Second-life EV batteries emerge as a disruptive solution for powering AI data centres

As AI data centres grapple with soaring power demands, repurposed electric vehicle batteries are swiftly becoming a cost-effective and sustainable solution for grid support, signalling a significant shift in infrastructure strategy.

The soaring power needs of artificial intelligence are pushing data centres into an expensive new contest for electricity, and operators are increasingly looking beyond the grid for help. One emerging answer may lie in a familiar piece of climate hardware: second-life electric vehicle batteries, which still retain enough capacity after automotive use to serve as stationary storage.

The idea is simple enough. Batteries removed from cars during warranty work or routine replacement often still hold about four-fifths of their original charge, making them less useful on the road but still valuable for storing electricity at fixed sites. In practice, they can be charged when power is cheaper and then discharged when demand spikes, helping smooth consumption for facilities whose computing loads can rise and fall quickly. Linda Li, chief financial officer of Re-Teck, told the publication that “Repurposed batteries are the way to break that barrier.” The company’s position is unusual because it handles retired packs from manufacturers including Tesla, Lucid and BMW, while also working on decommissioning for major data-centre operators such as Microsoft.

That market appears likely to grow quickly. Research cited in the article from Cervicorn Consulting and Market Techie suggests the global data-centre battery market could rise from about $3.38 billion in 2025 to nearly $6 billion by 2035, while lithium-ion shipments for AI-related storage may jump from 12 gigawatt-hours in 2025 to 272 gigawatt-hours by 2030. Against that backdrop, global EV sales topped 17 million in 2024, enlarging the future pool of batteries that will eventually need a second life.

The broader industry is already moving in that direction. Axios reported in July that General Motors had teamed up with Redwood Materials to supply US-built batteries for backup storage systems, a shift designed to meet rising demand for grid support as AI data centres add pressure to electricity networks. Separately, B2U Storage Solutions has announced partnerships to use retired batteries from Waymo’s fleet in stationary storage projects in California and Texas, while SoftBank is taking a different route by planning to manufacture its own batteries for AI infrastructure at its Sakai site in Osaka.

Taken together, the developments point to a larger change in how the AI build-out is being financed and powered. What was once waste from transport is increasingly being treated as infrastructure in waiting: a cheaper, faster-to-deploy buffer for data centres that need reliable electricity without adding proportionately to strain on the grid.

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Source: Fuse Wire Services