Redwood Materials, the battery recycling startup founded by former Tesla co-founder JB Straubel, will recycle production scrap for batteries destined for General Motors electric vehicles.
The company announced Thursday that it is partnering with Ultium Cells, the battery joint venture between GM and LG Energy Solutions, to recycle cathode, anode and waste cells from both its Warren, Ohio, and Spring Hill facilities. in Tennessee.
Battery recycling is a hot industry as automakers and battery makers seek to control the supply of battery materials, rather than relying on China, the world leader in the field. Incentives in the US and regions such as Europe are piling up for recycled and domestically produced critical battery materials – such as lithium, nickel, cobalt, manganese and graphite.
President Joe Biden’s Inflation Reduction Act, signed into law in August 2022, provides a tax credit for manufacturing batteries and processing vital minerals. Redwood directly benefited from this bill passed in February 2023, when the Department of Energy gave the startup a $2 billion loan to create battery recycling facility in Nevada. The DOE also gave Ultium Cells a $2.5 billion loan to develop its US cell manufacturing facilities
The corridor to truly recycle EV batteries is long, as most of these batteries are produced today and will not reach the end of their life for many years. That’s why deals like this one with Ultium for scrap recycling are so important. Redwood — which also has deals with Toyota and Panasonic (which makes batteries for Tesla) — has already become a household name in EV battery recycling, but any startup in this space needs a short-term strategy to stay in the long-term. runway. profits.
And scrap production is no small feat. A Redwood spokesperson told TechCrunch that the average battery factory produces 5% to 10% in scrap, which translates to Redwood handling about 10,000 tons of material annually—the equivalent of truckloads of scrap every day.
Redwood will recycle Ultium scrap and process it into high-quality battery materials, which are then supplied back to cell makers as domestic anode and cathode components, the company said.
Processing the materials—not just recycling them—is also part of Redwood’s long-term strategy, as the price of materials fluctuates regularly. The big money will come from processing materials, which today are typically shipped to Asia for processing and then shipped back to the US
In August 2023, Redwood raised $1 billion to expand its battery recycling facilities, part of its goal to boost copper anode foil and active material cathode production capacity. The company said at the time that it expected to produce about 100 gigawatt-hours of annual capacity of active cathode and anode foil materials, which can power 1 million EVs, by 2025. By 2030, Redwood hopes production will scale to 500 GWh per year, which could power 5 million EVs. The company has not confirmed if this timeline is still accurate.
The two Ultium Cells facilities that will supply scrap to Redwood are each 2.8 million square foot operations that are expected to produce more than 80 GWh of combined battery cells annually, and Redwood says it will receive most of that scrap. In 2021, Ultium also partnered with Canadian battery recycling company Li-Cycle for scrap recycling, a deal that was mutually dissolved, according to GM. Ultium is also in the process of building a third facility in Michigan. Redwood did not say whether it will take scrap from that plant as well.
Update: GM has confirmed that its deal with Li-Cycle is no longer ongoing.
