Redwood Materials, the battery recycling startup founded by former Tesla co-founder JB Straubel, will be repurposing production waste for batteries used in General Motors electric vehicles.
Announced Thursday, the company is collaborating with Ultium Cells, the joint battery manufacturing venture between GM and LG Energy Solution, to reuse cathode, anode and cell waste from their facilities in Ohio and Tennessee.
The battery recycling sector is rapidly growing as car manufacturers and battery producers aim to secure their battery material sources, rather than depending on China, the dominant player in the industry. Incentives in the U.S. and Europe are increasing for recycled and locally sourced essential battery materials like lithium, nickel, cobalt, manganese, and graphite.
President Joe Biden’s Inflation Reduction Act, signed in August 2022, offers a tax credit for battery manufacturing and critical mineral processing. Redwood received a $2 billion loan from the Department of Energy in February 2023 to construct its battery recycling plant in Nevada. Ultium Cells also obtained a $2.5 billion loan from DOE to expand its cell manufacturing facilities in the U.S.
The process of recycling EV batteries is lengthy, as most batteries are currently being produced and will not reach the end of their lifespan for many years. Hence, partnerships like the one with Ultium to recycle waste are crucial. Redwood, known for its deals with Toyota and Panasonic (a supplier for Tesla), needs a short-term strategy to sustain profitability on the lengthy path ahead.
Handling waste production is a significant challenge. A spokesperson from Redwood informed TechCrunch that on average, a battery factory generates 5% to 10% in waste, meaning Redwood manages approximately 10,000 tons of material yearly – equivalent to daily truckloads of waste.
Redwood will recycle Ultium’s waste and transform it into premium battery materials, which will then be provided back to cell manufacturers as locally manufactured anode and cathode components.
Material processing, beyond just recycling, is part of Redwood’s long-term strategy, considering the fluctuating material prices. The real profits will stem from processing materials, as currently, materials are often sent to Asia for processing before returning to the U.S.
In August 2023, Redwood secured $1 billion for enhancing its battery recycling operations, aiming to increase its anode copper foil and cathode active material production capacity. The company projected reaching a 100 gigawatt-hours annual capacity of cathode active materials and anode foil, capable of powering 1 million EVs by 2025. By 2030, Redwood aims to scale production to 500 GWh per year, sufficient to power 5 million EVs. However, the company has yet to confirm the accuracy of this timeline.
Ultium Cells’ two facilities supplying waste to Redwood each cover 2.8 million square feet and are anticipated to collectively produce over 80 GWh of battery cells annually, with Redwood set to receive the majority of the waste. In 2021, Ultium partnered with Canadian battery recycling company Li-Cycle for waste recycling, although GM’s confirmation on the current status of this collaboration is pending. Ultium is also constructing a third facility in Michigan. It remains undisclosed whether Redwood will also obtain waste from this new plant.
FAQ
Q: What is Redwood Materials’ primary focus?
A: Redwood Materials specializes in recycling production waste for batteries, particularly in the electric vehicle sector.
Conclusion
The partnership between Redwood Materials and Ultium Cells signifies a significant step towards sustainable battery production and waste management in the EV industry. As the demand for electric vehicles continues to rise, the importance of efficient recycling processes cannot be overstated. By repurposing production waste into high-quality battery materials, these companies are not only reducing environmental impact but also establishing a more resilient and self-sufficient supply chain for critical battery components.
