Redwood Materials, co-founder of Tesla, JB Straubel’s battery recycling company, is adding more big names to its growing list of partners. The company said Tuesday that Volkswagen and Audi have agreed to participate in their electric vehicle recycling program, as part of an effort to create a closed supply chain that can make electric vehicles more sustainable.
The Carson City, Nevada-based company will work directly with more than 1,000 VW and Audi dealers in the US to collect used EV batteries and ship them to its facilities for recycling. Redwood estimates it can recover more than 95% of the high-performance metals in those lithium-ion packs, including nickel, cobalt, lithium and copper. Those materials will then be used for new battery anodes and cathodes that Redwood said it will supply to US-based battery manufacturers.
Strong global demand for lithium-ion batteries to power electric cars and trucks is stressing the supply chain for internationally produced commodity minerals such as lithium, nickel and cobalt, all of which are trading at or near record levels. Currently, lithium costs nearly $75,000 per ton, according to trade economy, while nickel costs about $22,000 per ton. Redwood believes that a large-scale battery recycling infrastructure is the best way to manage tight supplies.
“As more and more batteries reach end-of-life, an ever-larger and infinitely recyclable resource becomes available,” Redwood CEO Straubel, who was previously Tesla’s CTO, said in an email.
Backed by companies like Ford and Amazon, Redwood has raised more than $800 million in the past two years, pushing its valuation to $3.8 billion, according to Pitchbook. The company is expanding its facilities in Nevada to handle an estimated six gigawatt hours of batteries this year, enough to supply packages for more than 60,000 electric vehicles. It also plans to build a $1 billion factory by 2025 to make cathode and anode material for electric vehicle batteries.
The new partnership with Volkswagen and Audi does not include direct investment in Redwood, said company spokeswoman Alexis Georgeson. Forbes the companies are already sending battery packs to the private startup. She declined to share details of the business relationship’s revenue.
The Volkswagen Group of America estimates that by 2030, 55% of its US sales will be electric vehicles. “This partnership allows us to move closer to our goal of closing the loop on a circular EV economy, giving US consumers another reason to go electric. said Scott Keogh, president and CEO of the regional auto unit.
For Redwood, 2022 was a boom year for partnerships. Earlier this summer, the company announced battery recycling alliances with Toyota, Ford, Volvo Cars, electric truck and bus manufacturer Proterra and bicycle maker Specialized. It also signed agreements with the state of California, Amazon, Panasonic and recycler ERI, which claims to be North America’s largest electronics consolidator.
In 2021, Redwood raised $775 million in a financing round that attracted investment from companies such as Ford, Fidelity, Bill Gates’ Breakthrough Energy Ventures and Amazon’s Climate Pledge Fund.
The closely held Redwood has not yet shared any earnings details, although Straubel told: Forbes in 2021 that its proprietary recycling technology already enables it to recover and resell base metals and materials at a “cost competitive” price level.
(For more information on Straubel and Redwood Materials, see: Tesla Tech Whiz gets wealth from your old batteries†