A Tesla co-founder J.B. Straubel left Tesla in 2019, then founded Redwood Materials Inc. The company initially started as a lithium-ion battery recycling company, is now set to build the US battery industry. Straubel says that they are set to build one of the largest battery materials factories in the world.
Currently, Redwood operated three battery facilities in Nevada. Now Redwood is in search of a one-million-square-foot factory in the US, which is expected to cost over $1 billion as mentioned by Straubel. He said, “It’s both inspiring and terrifying to see so many nations and car companies announcing their shift to electric vehicles. But there’s a massive gap in what needs to happen.”
Straubel announces that the company’s proper goal is to move a huge chunk of battery components from Asia to the US. It would enable Redwood to become a major US producer of cathodes. As cathodes are part of the battery component which decides the battery cost, it makes the company a cathode producer too. The new battery factory by the end of 2025, will produce 100 gigawatt-hours of batteries every year. Further, by 2030 the same factory will ramp production up to 500 gigawatt-hours every year. It would mean that the value of cathodes in the present prices, $25 billion worth cathodes are being made.
Additionally, by 2023 Redwood also plans to have similar operations in Europe. Straubel said, “These numbers sound insane, but when you look at what the market needs, I’m like- holy cow- is this even aggressive enough? Somebody’s got to do this. In fact, we need at least four companies doing similarly aggressive crazy things all in the same timeline.”
In the present scenario, EVs take up about 4% of passenger vehicles. Eventually, the numbers are going to increase at a much faster rate as each automaker is pushing shift towards EV manufacturing. It is known that at least 15 countries and 31 cities have made plans to work on internal combustion vehicles as a part of carbon emission reduction. In the US, President Joe Biden signed an executive order targeting at least half of the automobile sales by 2030.
Such EV shift increases the pressure on reducing battery prices, which is not possible unless manufacturers make aggressive calls. As the battery supply doubles in the world, the price is to reduce by 18 percent as stated by BloombergNEF. Large investments are being made by automakers individually on battery-making companies, or in research areas to reduce battery costs.
On the contrary, the prices of battery materials aren’t decreasing. The increase in demand is not aligned with the reducing raw materials. One practical solution is recycling batteries. While Redwood started out as a recycling company, it also focuses on making efficient batteries which will help build the battery manufacturing sector in the US.