Redwood Materials, the electric vehicle recycling company founded by the former chief technologist at Tesla, has secured a $2 billion green energy loan from the Biden administration, clearly a major win for the nascent operation.
The loan comes from the U.S. Department of Energy’s Advanced Technology Vehicles Manufacturing program, which famously helped put Tesla on the map and more recently boosted a joint venture between General Motors and LG Energy Solution to help finance the construction of a new lithium-ion battery manufacturing facility. U.S. Secretary of Energy Jennifer Granholm will visit Redwood’s plant in Nevada on Thursday to announce the loan.
Redwood recently announced plans to build a new $3.5 billion battery manufacturing and recycling plant in South Carolina. The 600-acre facility, which will be located just outside Charleston “in the heart of the ‘Battery strap,’” will employ approximately 1,500 people over 10 years and produce 100 GWh of cathode and anode components annually. However, the DOE loan will be for the company’s plant in Nevada.
Redwood Materials was founded in 2017 by Jeffrey “JB” Straubel, a former Tesla chief technology officer. In addition to breaking down scrap from Tesla’s battery manufacturing process with Panasonic, Redwood also recycles EV batteries from Ford, Toyota, Nissanspecialized, AmazonLyft and others.
Many of the batteries in first-wave electric vehicles, such as the Nissan Leaf and Tesla Model S, are now reaching their end of life and need to be recycled. After receiving batteries from its various partners, Redwood begins a chemical recycling process, removing and refining the relevant elements such as nickel, cobalt and copper. A certain percentage of that refined material can then be re-integrated into the battery manufacturing process.
Redwood is also positioning itself as a critical player in the effort to strengthen the US domestic battery supply. Today, most of the batteries used in everything from consumer goods like laptops and phones to electric vehicles are made abroad, usually in China. The Biden administration is trying to support domestic battery production through the Inflation Reduction Act, which offers $10 billion in incentives to companies building batteries in the US.
Redwood says it began producing anode copper foil at its Nevada facility late last year, and later this year expects to begin exploring production of cathode materials, which contain all of the critical metals in a battery, such as lithium, nickel and cobalt. The anode contains copper and graphite and is primarily responsible for a battery’s charging capacity. The company says it hopes to produce enough battery materials to power 1 million electric cars a year.
“DOE’s support for this project represents a critical milestone in the United States’ commitment to establishing a domestic battery supply chain rooted in manufacturing and American innovation,” the company said in a statement. “By locating this critical supply chain and manufacturing gigafactory scale anode and cathode components in the U.S. for the first time, Redwood addresses arguably the most important supply chain need in electrification and enables the United States to provide clean energy and sustainable transport plans.”
Update Feb 9, 12:27 ET: The DOE loan will be for Redwood’s plant in Nevada. An earlier version of this story misrepresented that fact.
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