Redwood Materials has recently inked a long-term contract to supply Toyota Motor with recycled materials, catering to the Japanese automaker’s ambitious $13.9 billion electric vehicle (EV) battery plant in North Carolina. This Nevada-based materials specialist plans to remanufacture EV battery components, utilizing materials provided by Toyota and sourced from end-of-life vehicles, primarily focusing on hybrid-electric models like the Prius.
While specific details regarding the value and timing of the agreement remain undisclosed, Redwood’s Chief Executive, J.B. Straubel, a co-founder and director at Tesla, emphasized that this contract marks a strategic move for Redwood to align and grow in tandem with Toyota’s future requirements. Straubel envisions a sustained partnership, anticipating Toyota’s expansion not only in the existing North Carolina facility but potentially in other locations as well.
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In an interview, Straubel outlined Redwood’s commitment to establishing a closed-loop, circular battery ecosystem. This initiative aims to curb EV costs by reducing reliance on imported materials, concurrently lessening the environmental impact associated with battery production. Redwood’s goal is to achieve an annual battery component production capacity of 100 gigawatt-hours in the U.S., sufficient to power over 1 million EVs annually, with provisions for a future expansion to 500 GWh.
As part of this collaboration, Redwood plans to supply battery components to Toyota from its existing Sparks, Nevada facility and, subsequently, from a new $3.5 billion facility currently under construction near Charleston, South Carolina. The company’s product offerings include remanufactured cathode active material, derived from recycled lithium, nickel, and cobalt, as well as anode foil made from recycled copper. These components represent a significant portion of the current lithium-ion cell production costs.
Founded in 2017 by J.B. Straubel, Redwood has gained prominence as one of the world’s leading battery recyclers. With a valuation of $5.25 billion and $2 billion raised, the company has secured a $2 billion loan backed by the Department of Energy. Redwood’s strategic positioning involves collaborating with key players in the automotive industry, having previously announced recycling deals with Panasonic, Volkswagen, and Ford. Notably, Redwood is also supplying remanufactured battery components to Panasonic, which operates an EV battery plant jointly with Tesla in Nevada.
This move by Redwood aligns with the broader trend of companies planning to manufacture battery components within North America, capitalizing on incentives such as the U.S. Inflation Reduction Act. These initiatives are geared towards reducing dependency on battery and material imports from countries like China. Redwood Materials’ expanding network of partnerships underscores its commitment to sustainable and cost-effective solutions in the rapidly evolving electric vehicle industry.
