Battery recycling company founded by former Tesla chief technology officer receives $2 billion loan from Energy Dept
- February 12, 2023
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Redwood Materials, a Nevada company that recycles batteries for electric vehicles and was founded by Tesla’s former chief technology officer, has received a $2 billion green energy loan from the Biden administration.
It secured the contingent loan from the Department of Energy’s Advanced Technology Vehicles Manufacturing program that helped Tesla more than a decade ago.
Secretary of Energy Jennifer Granholm joined Gov. Joe Lombardo on Thursday to announce the donation to dozens of employees at Redwood’s Nevada plant.
“This region points the way to a broader history of what’s happening in the country,” Granholm said, pointing to a map of 80 manufacturing or supply chain companies expanding or opening in the United States. Most were announced in response to President Joe Biden signing the 2021 infrastructure bill and the climate bill he signed last year, she said.
Battery recycling will help the US build its own electric vehicle supply chain, a key goal of the Biden administration, which wants to move away from gas-powered cars in the larger fight against climate change. Mr. Biden has also promoted domestic production of critical minerals used in electric vehicles and other electronics as part of climate action and to counter China’s longstanding supply chain dominance.
The Department of Energy said its conditional commitment shows its intention to fund the Nevada project, but several steps are needed before officials approve a final loan.
Redwood Materials was founded in 2017 by Jeffrey “JB” Straubel, former Tesla Chief Technology Officer. It now has more than 300 employees recycling used batteries and has supply deals with Ford and with Panasonic, which makes batteries for Tesla.
Straubel said the company already has more material than it can process from used consumer batteries from lawn mowers, cell phones and toothbrushes, as well as manufacturing waste from the manufacture of lithium-ion batteries.
The company says it can recover more than 95% of the elements in a waste battery, including lithium, nickel, cobalt, manganese and copper. The metals are then used to make anode and cathode components for new battery cells.
Redwood Materials “is going to have this outsized role in bringing the battery supply chain home — because you’re focusing on the parts that we don’t have in the United States,” Granholm told employees at Thursday’s event . “It’s you making history.”
Redwood Materials is expected to create about 3,400 construction jobs and employ about 1,600 full-time employees, the department said. The Nevada company’s history began under former Republican Gov. Brian Sandoval, who was in attendance Thursday. It continued under Democratic Gov. Steve Sisolak before the loan was approved with conditions under Lombardo, who acknowledged he was late in negotiations. The investments and resulting jobs help fulfill a campaign promise made by Lombardo and previous governors to diversify Nevada’s casino and tourism economy.
“That’s what we have to do to be successful in the state of Nevada,” Lombardo said. “We can’t put all our eggs in one basket.”
In December, the Nevada Governor’s Office of Economic Development awarded a $105 million tax incentive to Redwood, the second-largest equity investment in the office’s history after Tesla.
Last month, the Department of Energy announced a $700 million contingent loan to an Australian company to mine lithium in northern Nevada while the US seeks domestic supplies for the key component in electric vehicle batteries.
Redwood has also announced plans to build a $3.5 billion battery manufacturing and recycling factory in South Carolina.
Once fully operational, the battery materials campus in McCarran, Nevada, outside of Reno, will be the first domestic facility to support the production of anode copper foil and cathode active materials for a lithium-ion battery manufacturing process. The process would recycle used batteries and manufacturing waste and reprocess it into critical materials, the Department of Energy said in a blog post.
Straubel, CEO of Redwood, told The Associated Press last year that recycling battery materials will help the US build its own electric vehicle supply chain. China now dominates the EV supply chain, including critical minerals needed for EV batteries.
“Redwood fills a critical gap in this whole piece, and our goal is to close the loop on all the materials we’ve already quarried and turned into products and keep them in the regions where they’re purchased and used. Straubel told the AP, “Every battery that we can recycle is a battery’s worth of materials that we don’t have to dismantle again.”