Redwood Materials Secured a $2 Billion Loan for EV Battery Recycling Plant in Nevada

Redwood Materials secured a $2 billion loan for its EV battery recycling plant in Nevada 6 photos
Photo: Redwood Materials | Edited
Redwood Materials existing facility in NevadaVolkswagen asks Redwood Materials to recycle its American battery packsRedwood Materials will recycle Toyota's batteriesFord and Redwood Materials Join Forces to Recycle Battery PacksFord and Redwood Materials Join Forces to Recycle Battery Packs
EV battery recycling is one of the hottest topics these days, as the EV market begins to heat up. Redwood Materials, a company that wants to recycle hundreds of gigawatt-hour of Li-ion Batteries, is one step closer to completing its first recycling facility in Nevada thanks to a $2 billion government loan.
As the market embraces electric vehicles on a larger scale, EV detractors love to raise the non-issue of what we do with all those millions of battery packs when they reach the end of life. Many think that Li-Ion batteries are impossible to recycle or that the process is costly enough not to be worth the bother. Then they would rather end up in a landfill than be recycled. In fact, EV batteries contain precious materials, and extracting them is a very profitable business.

One of the few recycling companies today is Redwood Materials, a startup founded by the ex-Tesla CTO JB Straubel. After departing, he kept a close relationship with the leading EV maker and is now building a recycling facility in Nevada to supply the local Tesla gigafactory with battery materials.

The Redwood Materials recycling facility in Nevada is expected to cost around $3.5 billion to build and will be capable of processing 100 GWh of electrode materials. This would be enough to make one million EV battery packs using recycled materials. Although it is far from reaching that point, the Redwood Materials facility is already supplying Panasonic and Tesla with copper foil for batteries produced at Giga Nevada.

The operations would soon expand with new materials in higher quantities, thanks to a $2 billion government loan Redwood Materials received from the U.S. Energy Department. The money comes in handy to complete the construction of its battery recycling and remanufacturing complex in Nevada. Redwood Materials’ vision is to have a closed-loop supply chain for battery production in the United States. This is especially important because the Inflation Reduction Act has incentivized carmakers and battery manufacturers to produce electric vehicles in the U.S.

“It’s going to be a slam dunk for our domestic burgeoning electric vehicle industry,” Energy Secretary Jennifer Granholm told Reuters, adding that Redwood will play an “outsized role in bringing the battery supply chain home because they are focused on the pieces that we don’t have in the United States.”

Redwood Materials will draw down the first loan tranche later this year, according to JB Straubel. The goal is to accelerate production and shorten the time to get the northern Nevada complex, which is already producing copper foil for battery anodes, to full scale. Redwood Materials is on a path to becoming one of the world’s largest recyclers and manufacturers of battery materials. This goes beyond copper and includes lithium, cobalt, and nickel to reach around 90% of a battery’s critical materials.

In addition to its Nevada processing facility, Redwood Materials is also planning a second plant in Charleston, South Carolina. The plant would have similar capacity and costs as the Nevada facility, with the SC facility running about two years behind the one in Nevada. Straubel says the Charleston complex would later expand to “several hundred gigawatt-hour.”

Nevertheless, the main issue is not building the processing facilities, but getting enough used batteries to operate at such a scale. We’re still years away from the moment many of the batteries in the first waves of electric vehicles would reach the end of life. That’s why Redwood Materials has signed recycling agreements with several EV makers besides Tesla, including Ford, Toyota, and Volkswagen.
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About the author: Cristian Agatie
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After his childhood dream of becoming a "tractor operator" didn't pan out, Cristian turned to journalism, first in print and later moving to online media. His top interests are electric vehicles and new energy solutions.
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