Tesla Co-Founder’s Critical Minerals Plant Starts Production
As the Tesla co-founder’s battery recycler opens a new facility, it’s also selling critical minerals to a wider set of buyers as the EV market is set to decline.
Redwood Materials Inc., a battery recycling venture led by Tesla Inc. co-founder JB Straubel, has begun operations at a $3.5 billion factory in South Carolina that will supply badly needed critical materials.
The company has brought a system online that’s capable of recovering 20,000 metric tons of critical minerals annually, said Straubel. Initially founded to fill a gap in the electric vehicle battery supply chain, Redwood is in the midst of a broader shift in strategy as it navigates an expected slowdown in EV demand.
The pivot also comes at a time when President Donald Trump is pushing to onshore the supply chain for materials essential to US national security.
Taking into account Redwood’s existing recycling plant in Sparks, Nevada, which recovers 60,000 tons of critical minerals annually, the firm says it is now the only major domestic source of cobalt and produces as much nickel and lithium as the largest mines in the US.
The South Carolina facility isn’t operating at full capacity, and the company declined to set a ramp-up timeline. It also declined to provide a breakdown of how much of each mineral it’s recovering at the facility.
Redwood was founded in 2017 to recycle EV batteries and produce materials like cathodes and copper foils for anodes. The company had said in 2022 that it planned to produce enough materials for a million EVs annually by 2025 and 5 million by 2030, and it had agreements with Ford Motor Co., Toyota Motor Corp. and Volvo, among others.
Yet its commercial cathode production facility in Nevada, which was slated to open in 2024 and produce 100 gigawatt-hours of battery components by this year, is still under construction with no announced opening date. While the company had planned to expand copper foil production at both of its facilities, it stopped producing it in Nevada and no longer plans to do so in South Carolina.
The industry has also faced challenges from the Trump administration, which recently canceled hundreds of millions of dollars in grants to other battery recyclers. With the administration’s attacks on EVs further impacting the industry, including winding down federal incentives in September, Redwood has increased its focus on finding other buyers. The bulk of the critical minerals the company produces are going to customers outside the EV sector, Straubel said.
“The nickel and cobalt markets are largely not driven by batteries. They’re not the biggest consumers of those particular elements,” Straubel said.
Nickel is used in stainless steel; specialty alloys, or a custom metal blend for niche applications; and industrial chemicals, while cobalt is also used in a number of high-performance alloys like those found in jet engines. While he declined to name them, Straubel said Redwood sells its critical minerals to about 20 to 30 companies, including large industrial customers using the materials in products and mining companies that process and refine them.
The company has also shifted its focus to serving data centers’ burgeoning power demand, starting a new unit this year called Redwood Energy that turns degraded EV batteries into grid-scale energy storage systems. Retired EV batteries can still work for large-scale energy storage because those systems put less strain on the hardware. In June, it unveiled a modest 63 megawatt-hour system – the equivalent of about 800 EV battery packs – paired with 12 megawatts of solar on its Nevada campus, powering a 2,000 GPU data center.
Redwood raised a $350 million Series E at a valuation of more than $6 billion last month in part to speed up energy storage deployment. That side of the business is “growing faster” and is “a new focus that we didn’t really know we were going to have a few years ago,” Straubel said.