Tesla Motors co-founder JB Straubel left that company in 2019 to pour his energy into a relatively unknown EV battery recycling startup called Redwood Materials. Tesla went on to dominate the news cycle year after year, while the name of Redwood has been a drop in the media bucket. Nevertheless, four years and $4 billion later, everybody is talking about EV battery recycling and things are popping over at Redwood.
Investors Pour Another $1 Billion Into EV Battery Recycling
Straubel founded Redwood Materials in 2017 while still at Tesla. The latest news from Redwood is a new $1 billion Series D round of equity funding, announced earlier this week. Redwood plans to use the cash infusion to build up its lithium-ion battery materials recycling operations in the US. The goal is to provide domestic EV battery manufacturers with an all-important onshore materials supply chain to qualify for benefits under the 2022 Inflation Reduction Act.
EV battery recycling also helps to satisfy environmental concerns over the lithium supply chain. Lithium-ion batteries require lithium and other substances that require mining, including surface mines and open pit mines. The impacts of lithium extraction are also amplified by the use of large open-air lagoons.
Despite all the impacts, lithium mining has not been a particular concern in the US for decades. The nation has had just one lithium mine in operation since the 1960s. However, that is changing as a result of rising electric vehicle demand and federal policies favoring onshore supplies of critical materials. A new lithium mine is already under construction in Nevada despite an uproar of protest among local tribes and other environmental stakeholders. A second mine is also proposed for North Carolina.
$2 Billion More For EV Battery Recycling & Bidenomics
As the environmental impacts of lithium mining loom into view, auto manufacturers are scrambling for more sustainable supply chain solutions. EV battery recycling is there to help, and it’s been a busy year for Redwood. The Series D round beat an earlier estimate of $700 million by a long shot. The fresh swarm of capital adds $1 billion to another $1 billion previously raised.
In February, the Energy Department’s Loan Programs Office added to the funding pot when it confirmed a $2 billion conditional loan commitment for Redwood to build out its production campus in McCarran, Nevada. Assuming that Redwood meets the conditions of the loan, that’s $4 billion all together.
The plan is to recycling spent batteries and recover scrap materials from factories to produce copper foil for EV battery anodes and active materials for the cathodes, making McCarren the first such facility in the US (much more CleanTechnica coverage is here).
EV Battery Recycling: It’s Complicated
The McCarren facility also handles end-of-life batteries from other consumer goods, including cellphones, laptops, and power tools, along with other electronic waste. Presumably, spent EV batteries will account for an increasing proportion of Redwood’s feedstock as more EV battery packs reach the end of their lifespans.
That has already complicated matters. “Existing regulatory frameworks were not intended to address recycling pathways for large electric vehicle battery packs,” Redwood explains. The cost of transportation is also a sticking point, including the cost of shipping spent batteries from an out-of-life car to a recycling center.
Bidenomics!
As for that $2 billion from the Energy Department, the Loan Programs Office was establish by Congress during the Bush administration, tasked with stepping in to help bring new high risk, high reward energy-related technologies to market. Now it is a cog in the wheel of Bidenomics, where it has taken up the responsibility for ensuring that the benefits of its loans ripple out to rank and file workers.
“Redwood Materials is expected to create approximately 3,400 good-paying construction jobs and employ approximately 1,600 full-time employees,” the Loan Programs Office explained in a press release dated February 9, 2023. “In addition, Redwood Materials will rely on a construction workforce comprised of union, Minority and/or Woman-Owned Business Enterprises.”
“LPO works with all borrowers to create good-paying jobs with strong labor standards during construction, operations, and throughout the life of the loan and to adhere to a strong Community Benefits Plan,” they added.
Will It Make A Difference?
EV battery recycling will have a significant impact on the domestic battery supply chain, if all goes according to plan. The Energy Department expects that materials from Redwood will support the manufacture of more than 1 million new electric vehicles annually in the US.
That could account for a large portion of EV manufacturing in the coming years. Total annual vehicle production in the US has bounced around the 10 million plus-or-minus mark in recent years. The Energy Department anticipates that EVs will take a 35% share by 2030, up from their current share of 2%.
“To meet increased demand for lithium-ion batteries, recycling will play an increasingly important role in battery materials production,” the Energy Department notes. “On average, Redwood can recover greater than 95% of the critical battery elements in an end-of-life battery (including lithium, nickel, cobalt, manganese, and copper), and then use those metals to manufacture anode and cathode components domestically for U.S. battery cell manufacturers.”
Whatever Happened To JB Straubel?
Meanwhile, Redwood has already laid plans to build a second EV battery recycling campus near Charleston, South Carolina.
“Similar to our Nevada operations, Redwood’s South Carolina operations will be 100% electric and won’t use any fossil fuel in our processes (we will not even pull a gas line to the site),” the company explained in a press release last year.
EV battery recycling is quite a switcheroo for JB Straubel, who joined Tesla Motors in time to introduce the company’s first car, the Roadster, in 2008. The $100,000 electric two-seater sported thousands of 18650 rechargeable lithium-ion batteries under the hood. Those are the same kind of batteries used in laptops and other electronic devices, measuring just 66 millimeters long and 18 millimeters in diameter.
Tesla Motors was incorporated in 2003 as the creation of Martin Eberhard and Marc Tapenning (see complete CleanTechnica coverage here). Straubel joined in 2004 as Chief Technology Officer and stayed until 2019.
“JB Straubel wasn’t just Tesla’s CTO — he invented the carmaker’s core technologies,” ran the headline at CNBC when Straubel left.
“His name is on a majority of patents that Tesla filed, especially relating to electric vehicle batteries — safety, architecture, monitoring and power management,” added CNBC reporter Lora Kolodny.
Now he’s back at Tesla, having been elected to the Board of Directors at a shareholder meeting last May.
“Straubel joined Tesla in 2004 and spent 14 years as the chief technology officer. He has been credited with Tesla’s battery cell design and also led the construction and concept of Gigafactory Nevada and the production of Model 3,” notes Reuters.
Perhaps Straubel can exercise a calming influence over Tesla CEO Elon Musk’s social media habits, but that remains to be seen.
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Image: Proposed EV battery recycling campus near Charleston, South Carolina (courtesy of Redwood Materials).
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