A Tesla co-founder aims to build an entire US battery industry
Bloomberg News | September 14, 2021 |
Redwood Materials Inc., the battery recycling company created by Tesla Inc. co-founder J.B. Straubel, has been keeping a big secret: It isn’t really a recycling company.
Sure, Redwood has risen quickly to become the biggest lithium-ion battery recycler in the U.S.. But Straubel didn’t leave Tesla in 2019 just to clean out America’s junk drawers. His broader goal, described to Bloomberg for the first time, is to move a huge chunk of the battery-component industry from Asia to the U.S.
“It’s both inspiring and terrifying to see so many nations and car companies announcing their shift to electric vehicles,” Straubel said. “But there’s a massive gap in what needs to happen.”
To fill that gap, Straubel has set out to build one of the largest battery materials factories in the world. Redwood, which currently operates three facilities in Nevada, is searching for a location farther east to build a new million-square-foot factory. At a cost of well over $1 billion, according to Straubel, the addition will enable Redwood to become a major U.S. producer of cathodes. (Every battery has two electrodes — an anode and a cathode — between which trillions of charged lithium atoms travel. It’s the cathode that largely determines a battery’s cost, performance and environmental footprint.)
Straubel says the U.S. factory will produce material for 100 gigawatt hours of batteries a year by the end of 2025. That’s enough for about 1.3 million long-range vehicles a year, on par with the biggest producers in Asia. By 2030, the same facility will ramp up to 500 gigawatt hours a year, he says. At today’s prices, that’s $25 billion of cathodes a year. Redwood plans to build a similar operation in Europe by 2023.
“These numbers sound insane, but when you look at what the market needs, I’m like holy cow — is this even aggressive enough?” Straubel says. “Somebody’s got to do this. In fact, we need at least four companies doing similarly aggressive, crazy things all in the same timeline.”
The not-just-recycling company
Straubel left Tesla, in part, because of his growing alarm over a looming choke point in the global supply chain. Car companies were finally paying attention to battery manufacturing, he said, but were less interested in the “less sexy” components that go into them. Redwood is pursuing three types of operation: recycling, manufacturing copper foils for anodes, and producing cathodes. Recycling is done at headquarters in Carson City, Nevada. The company recently broke ground on a 100-acre site in Story County, Nevada, to make the delicate copper foils, a component in short supply. A cathode factory will be its biggest endeavor by far, Straubel says.
The company’s target of 100 GWh in 2025 means it can no longer rely on recycled materials alone. Unlike some consumer electronics, there’s a long lag between when electric cars are made and when their batteries are ready to be recycled. The reuse of packs in secondary applications can delay that further. Today, electric cars account for less than 10% of Redwood’s recycling stock. “We’re going to push the recycled percent as high as possible, but that is really going to be dependent on the availability of recycled materials,” Straubel said. “If we end up consuming 50% or more of virgin raw materials, that’s fine.”
In the decades to come, Straubel is confident that recycled materials will be used for “close to 100%” of the world’s battery production. Recycling is already profitable, he said, and eventually companies that don’t integrate recycling with refining and production won’t be able to compete on cost. Challengers are equally confident in the outlook, including Worcester, Massachusetts-based Battery Resourcers Inc., Canada startup Li-Cycle Holdings Corp. and industry incumbents like China’s GEM Co.