JB Straubel (47), Tesla’s fifth employee and the car manufacturer’s long-time head of technology, is expanding into Europe with his battery recycling start-up Redwood Materials. Elon Musk’s (51) colleague’s company has taken over Redux Recycling, the leading lithium-ion battery recycler in the EU.
“The takeover is Redwood Materials’ first step into Europe,” said Dirk Demuth, Senior Vice President of European Operations at Redwood, in an interview with manager magazin. Redux, based in Bremerhaven, is the first operational location in Europe that Redwood has outside of USA take over.
Straubel founded Redwood, based in the US state of Nevada, in 2017. The company recently completed another round of financing more than a billion dollars from prominent investors collected. These include the US investment bank Goldman Sachs and Microsoft’s Climate Innovation Fund.
High demand for raw materials for electric car batteries
The market for battery recycling and material production is growing rapidly as electromobility ramps up. Straubel, who already has production capacity in the USA, also wants to get involved in the European market. “Europe continues to be the world’s fastest-growing electric vehicle market, driven by automakers’ commitment and strong government support for electrification,” Redwood said in a statement. Straubel had already announced its expansion into Europe in February 2022.
Since then, various companies have been evaluated and an agreement has finally been reached with the owner of Redux, says Demuth. “Redux is based in Germany. And Germany accounts for 25 to 30 percent of the European EV market. That’s a good fit. And that’s also the reason why we’re going Germany come.”
Acquisition makes Redwood one of the main players in Europe
According to Demuth, the fact that Redwood chose Redux was also due to the company’s market presence and processes. “Redux is very well established in the battery recycling market,” says Demuth. The acquisition positions Redwood as a key player in this market. In addition, Redux still has capacity to grow further. “The acquisition will give us a well-established EU presence that will allow us to rapidly expand our operations, increase battery recycling capacity and work closely with already established suppliers, customers and industry partners across Europe,” said Redwood.
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Recycled product: Redux obtains, among other things, aluminum from old batteries
Photo: Wolfgang Geyer
The deal looks like this in detail: Redwood Germany, led by Demuth, acquires 100 percent of Redux Recycling GmbH, a subsidiary of the Austrian family business Saubermacher. The company thus becomes a subsidiary of Redwood Germany and will continue to be led by Redux managing director Martin Reichstein.
However, the former Redux location in Offenbach, where household and device batteries are recycled, will not be taken over by Redwood. This location was spun off and continues to operate as Saubermacher Recycling GmbH. Redwood and Saubermacher do not disclose the purchase price.
Lithium-ion batteries: 10,000 tons of recycled material per year
The plant in Bremerhaven can process 10,000 tons of recycled material annually. Redwood wants to fully exploit this capacity in the future, says Demuth. The facilities are designed to recycle electric vehicle and e-bike batteries, stationary storage systems and consumer electronic devices such as cell phones, laptops and drills. The location is in close proximity to the port of Bremerhaven, one of the largest and most important import ports for vehicles. This should enable Redwood to recycle and process batteries from all over Europe.
In addition to the factory, Redwood is also taking over a team of around 70 employees from Redux, including chemical engineers, metallurgists and materials scientists. “Their expertise in the field of mechanical separation enables us to obtain high-purity metal concentrates,” says the US company. The company’s proprietary technology enables the extraction of valuable materials from batteries, including cobalt, lithium, nickel and manganese, with a recovery rate of more than 95 percent.
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Now belongs to Redwood: The Redux recycling plant in Bremerhaven
Photo: PR
“We are taking over the company as it is and will continue to invest in order to write a growth story,” announces Demuth. For this reason the former BASFManager also moved to Redwood. Demuth had been responsible for the automotive emissions business at the chemical giant for years.
Saubermacher himself lacked the financial resources for the desired expansion. “Only those who quickly reach a critical size can assume a leading role in the field of lithium-ion battery recycling in the long term. Saubermacher alone cannot make the significant investments required for this. With Redwood we have found the right partner to ensure this for our customers “To close the battery cycle sustainably,” says Ralf Mittermayr, CEO of Saubermacher AG, about the takeover.
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Redwood is considering building additional locations in the medium term. “We want to continue to grow. Our goal is to build a battery campus in Europe.” But that will probably take a few years. “First of all, we are proud to have created a first location in Europe. And we now want to push this forward with energy and enthusiasm.”