Tesla Cofounder’s Recycling Startup Plans To Become EV Battery Material Powerhouse

Redwood Materials, a battery recycler created by Tesla cofounder and former tech chief JB Straubel, intends to move beyond just recovering valuable materials from used lithium-ion cells and electronics and invest more than $1 billion in a U.S. plant that will make materials needed for electric vehicle batteries.

The Carson City, Nevada-based company, which raised $700 million in July to scale up recovery of lithium, cobalt, nickel and other metals, said in a blog post that it plans to use recycled products to manufacture “precision battery materials” it will sell to makers of lithium-ion cells. Redwood will select a site for the battery materials plant in 2022 and have capacity to produce 100-gigawatt-hours of cathode material and enough anode foil for 1 million electric vehicles annually by 2025. The plant will employ up to 1,000 workers, with a goal of a fivefold increase in annual output by 2030, the company said.

“Redwood will produce strategic battery materials in the U.S., first supplying battery cell manufacturing partners with anode copper foil and cathode active materials,” CEO and cofounder Straubel said in the post. “We plan to transform the lithium-ion battery supply chain by offering large-scale sources of these domestic materials produced from as many recycled batteries as available and augmented with sustainably mined material.”

The company’s plan coincides with a push by the Biden Administration to dramatically expand production and sales of electric vehicles as part of efforts to combat climate change. Doing so depends on increasing supplies of materials mined from around the world, expanding production of battery packs in the U.S. and localizing production of the components that go into battery cells. Currently, the anode and cathode materials each cell requires are produced mainly in Asia, rather than in the U.S.

Redwood has raised at least $740 million since its founding in 2017 and is valued at $3.7 billion, according to Pitchbook. It uses proprietary processes to separate commodity materials out of old batteries and electronics scrap received from partners including battery makers Panasonic and Envision AESC, electric bus builder Proterra and ERI, North America’s biggest e-waste recycler.

The company processed 10,000 tons of refuse in 2020 at its operations near Tesla’s Nevada Gigafactory and will “recycle several gigawatt-hours of material” this year, Straubel told Forbes in July. One gigawatt-hour of battery material would be enough for between 10,000 and 20,000 electric vehicles, depending on pack size.

(For more on Straubel and Redwood Materials, see “Tesla Tech Whiz Is Mining Riches From Your Old Batteries.”)

During his time at Tesla, Straubel was instrumental in overseeing the design of the carmaker’s battery pack and motors, beginning with the 2008 Roadster. He also helped set up and run the massive Gigafactory in Sparks, Nevada, the biggest U.S. battery plant. He left Tesla in late 2019.

“To make electric vehicles and energy storage products fully sustainable and affordable we need to actually close the loop at their end of life,” Straubel said. “This means not just collecting and recycling the batteries but also continuing further, fully refining the materials we recover and then manufacturing them back into precision battery materials to use those raw materials again.”