Redwood Supplies nabs $2 billion mortgage for battery recycling in Nevada

Redwood Supplies has attained a $2 billion mortgage dedication from the Division of Vitality, the company announced on Thursday through its mortgage packages workplace.

The battery-recycling startup will use the funding to construct and develop its battery recycling facility exterior of Reno, Nevada. The power takes end-of-life electrical automobile batteries and automotive manufacturing scrap, processes these, and churns out uncooked supplies and merchandise which can be used to make new EV battery cells, specifically anode copper foil and cathode-active supplies. 

Redwood Supplies was based by former Tesla CTO and cofounder JB Straubel in 2017 throughout his tenure at Elon Musk’s automotive firm.

Straubel left Tesla to run Redwood Supplies full-time in 2019, and several other former Tesla staff have joined him there together with COO Kevin Kassekert, who beforehand labored as a vice chairman of individuals and locations at Tesla.

As CNBC beforehand reported, final yr Redwood Supplies struck a multi-billion dollar deal with Tesla provider Panasonic.

“These are very capital-intensive initiatives, and we’re in a contest with Asia to ramp this up and to convey these provide chains and manufacturing operations again to the US,” mentioned Straubel on CNBC’s The Alternate on Thursday.

He added, “The US battery demand and EV demand is rising…however we’ve a great distance earlier than that offer chain is predominantly moved to the US.”

The Director of the DOE’s Mortgage Applications Workplace, Jigar Shah, wrote in a post concerning the new mortgage dedication:

“With a purpose to meet the wants of the quickly rising EV market, america might want to develop battery recycling capabilities, in addition to develop our home capability for producing battery precursor supplies. By reducing the price of the essential supplies for lithium-ion batteries utilizing recycled supplies, electrical autos can turn into extra accessible to decrease earnings communities.”

With the goal of reducing greenhouse gasoline emissions over the subsequent decade, President Joe Biden pushed for and signed the $430 billion U.S. Inflation Discount Act (IRA) in August 2022. The DOE’s new mortgage to Redwood Supplies is available in half from that regulation, which has thus far resulted in additional than 100,000 new green jobs being announced.

The DOE says it appropriated $55 billion in new estimated mortgage authority for its Superior Expertise Autos Manufacturing program by the IRA. This identical program as soon as helped Tesla get its begin — and Tesla repaid their mortgage early and grew right into a juggernaut, in sharp distinction with cleantech firms that fizzled like Solyndra, for instance.

Redwood Supplies has a pilot line up and running for manufacturing of anode copper foil in Nevada already. It’s aiming to assist the manufacturing of greater than 1 million EVs per yr, the DOE mentioned in its put up, which may assist drivers keep away from an estimated 3.5 million tons of CO2 and different tailpipe emissions, yearly.

Whereas Tesla could have been the birthplace of Redwood Supplies, and a accomplice of the corporate as we speak, it may compete with the recyclers on know-how ultimately. In its 2022 annual financial filing with the SEC, Tesla mentioned, “We’ve got agreements with third social gathering battery recycling firms to recycle our battery packs and we’re additionally piloting our personal recycling know-how.”