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Redwood Materials Boosts Capital To Become EV Battery Material Powerhouse


The Carson City, Nevada-based battery recycler company of Tesla co-founder and former tech chief JB Straubel has successfully raised $700 million last July for its plan to scale up its recycling process of lithium, cobalt, nickel, and other materials.

The company also revealed that it is moving beyond just recovering valuable materials from used lithium-ion cells and electronics. It will invest $1 billion to build a plant that will produce materials needed for electric vehicle (EV) batteries.

Redwood plans to build its plant in 2022 to produce 100 gigawatt-hours of cathode material and sufficient anode foil for million vehicles annually in 2025. The plant will employ some 1,000 workers to increase its output five times by 2030 annually.

Ambitious plans

In the company’s blog post, Straubel announced that Redwood is geared towards supplying the US market with strategic battery materials. It will first provide battery cell manufacturing collaborators with active cathode materials and anode copper foil. Afterward, the company intends to innovate the supply chain of lithium-ion batteries by offering high-volume and large-scale supplies of domestic materials. 

The challenge right now for the company is to gather enough materials it can source from different countries in the world. At present, the production of anode and cathode materials is mainly in Asia. Thus, it is necessary to increase local production of the materials to minimize production costs and carbon footprint. 

Since its founding in 2017, Redwood has already raised a total of $740 million and is valued at $3.7 billion by Pitchbook. Last July, Amazon, Breakthrough Energy Ventures, and Capricorn Investment Group put a total of $40 million in the company.

In 2020, the company was able to process some 10,000 tons of refuse and will recycle several gigawatt-hours of material this year. Depending on the battery pack size, a gigawatt-hour battery would be enough for 10,000 to 20,000 electric vehicles.

The way forward

The company is currently scaled to recover materials from 45,000 electric car battery packs annually, translating to around $90 million of revenue. A known buyer of the company’s reclaimed alloy is Panasonic, while its key buyer of lithium-ion scraps is EV battery specialist Envision-AESC.

Straubel explained some challenges in EV battery production, such as making sustainable and affordable electric vehicles and energy storage products. To do so would require “closing the loop at their end of life.” In other words, producers should not only collect and recyle these batteries but continue refining the materials recovered fully and then manufacturing them using those raw materials again. 

The global demand for EV lithium-ion batteries will increase by 50% this year from 2020’s level to 223 gigawatt-hours, which will double in 20223 to 443 gigawatt-hours. It is estimated that by 2027 the demand will be at 1.10 terawatt-hours.

According to Benchmark Mineral Intelligence Managing Director Simon Moores, because of the increase in demand for EV batteries, the prices of its materials are expected to rise. As a result, cobalt, graphite, copper, and nickel prices are expected to surge.

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