Nevada Battery Recycling Facility to be Built by Redwood Materials with $2 Billion Loan

Department of Energy's loan programs office announced Thursday that Redwood Materials has received a $2 billion loan commitment.

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This funding will be used by the battery-recycling company to build and expand its facility outside of Reno, Nevada, which is where it currently operates. To make the best EV batteries, the facility takes end-of-life electric vehicle batteries and automotive production scraps, processes them, and produces raw materials and products that are used to make new EV batteries, namely anode copper foil and cathode-active materials. 

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Former Tesla CTO and co-founder JB Straubel founded Redwood Materials in 2017 during his tenure at Elon Musk's car company, during which he served as the company's chief technology officer.

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As of January 2019, Straubel has left Tesla to run Redwood Materials full-time, and several former Tesla employees have joined him at the company, including Chief Operating Officer Kevin Kassekert, who previously served as vice president for people and places at Tesla.

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Redwood Materials, a supplier to Tesla Motors, struck a multibillion-dollar deal with Panasonic last year to Trade Algo's previous report.

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“This is a very capital-intensive project, and we are in a competitive battle with Asia, and we’re in a competition to get the supply chains and manufacturing operations back to the United States,” Straubel said on Trade Algo on Thursday.

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He added, “There is a growing demand for batteries and electric vehicles in the US, but we have a long way before that supply chain is predominantly moved to the US.”

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Jigar Shah, the Director of the DOE's Loan Programs Office, wrote in a post about the new loan commitment:

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“As the electric vehicle market grows at a rapid rate, it is essential for the United States to expand the capacity for reclaiming batteries, as well as the capacity for making battery precursor materials domestically to meet the requirements of this market. Electric vehicles can become more accessible to lower-income communities if the cost of the critical materials used in lithium-ion batteries can be reduced using recycled materials."

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Intending to reduce greenhouse gas emissions over the next decade, President Joe Biden has taken the initiative to push for and sign the $430 billion U.S. Tax Cut and Jobs Act (TCJA) in August 2022, to reduce greenhouse gas emissions. Among the many benefits of the DOE's new loan to Redwood Materials is the fact that it was inspired by that law, which until now has resulted in the creation of more than 100,000 new green jobs.

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The DOE says that it has appropriated $55 billion in new estimated loan authority through the IRA for its Advanced Technology Vehicle Manufacturing program. In contrast to the cleantech companies that fizzled like Solyndra, for example, the same program once helped Tesla to get started, and Tesla repaid its loan early and became a global juggernaut, which stands in stark contrast to cleantech companies that grew into juggernauts.

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In Nevada, Redwood Materials has already set up a pilot line to produce anode copper foil, which is already running in a continuous cycle. The DOE is aiming to support the production of 1 million electric vehicles a year by the year 2020, according to its post, which could help drivers reduce their emissions of CO2 and other pollutants created by tailpipes by about 3.5 million tons every year, according to the DOE.

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“Even though Tesla was the birthplace of Redwood Materials and is a partner of the company today, it is possible that eventually, it could compete with the recyclers on technology. Tesla made a statement in its SEC filing for its annual financial report for 2022 that it had agreements with third-party companies to recycle batteries  We work with companies to recycle our battery packs, and we are also developing our technology for recycling."