Former Tesla executive signs new recycling deal as battery costs skyrocket

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Take a walk with JB Straubel through the Redwood Materials recycling plant in Carson City, Nevada and one thing stands out: pallets stacked on pallets full of old batteries, defective battery cells and waste from the Panasonic factory neighbor.

“The scale of the waste and scrap problem and the scale of batteries to be recycled is, I think, shocking to most people,” said Straubel, Founder and CEO of Redwood Materials. Straubel spent over a decade at Tesla, before stepping down as CTO in 2019 so that he could focus on growing his recycling business.

Redwood Materials has entered into an agreement to recycle scrap metal and faulty battery cells for Envision AESC, which makes batteries for the Nissan LEAF in Smyrna, Tennessee. This is the latest initiative launched by the Straubel company in 2017 to provide battery manufacturers and automakers with raw materials in short supply as the production of electric vehicles increases around the world.

“We bring the materials back to a very clean, basic state so that there is no loss of efficiency,” said Straubel. “It is actually indistinguishable whether there is cobalt from an old battery or a mine.”

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Cobalt, lithium, nickel and other minerals and metals used in electric vehicle batteries have become very hot commodities, so hot that prices have soared to 52-week highs. The price hike is being fueled by an announced increase in lithium-ion battery production as automakers from Tesla to General Motors and Ford dramatically ramp up their EV plans over the next decade.

“To make the batteries the world needs ten years from now, industry will need 1.5 million tonnes of lithium, 1.5 million tonnes of graphite, 1 million tonnes of battery grade nickel and 500 000 tonnes of battery grade manganese. The world produces less than a third of each of these materials today. New sources of battery materials are much appreciated and absolutely necessary, ”said Sam Jaffe, Managing Director of Cairn ERA, an energy consultancy firm.

To make his point clear, Jaffe points out that US demand for lithium-ion batteries exceeded 43 megawatt hours last year and will reach 482 megawatt hours by 2030.

This growth is great news for Panasonic, which manufactures battery cells at the Gigafactory it operates with Tesla in Sparks, Nevada. Thanks to its latest expansion, the Gigafactory will produce just under 2 billion battery cells this year.

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Allan Swan, who runs the plant, says more production is needed. “Here in the United States, we definitely need four, five, six of these factories to support the auto industry,” he said.

Celina Mikolajczak, vice president of battery engineering and technology at Panasonic Energy North America, believes the booming EV plans mean the industry must consider battery recycling as a new source of key minerals.

“There is a lot of energy expended to extract these minerals and it makes absolutely no sense to landfill them,” she said. “We’d be really stupid if we didn’t take advantage of the ability of older cells to create the next generation.”

Straubel and his team at Redwood like to say the biggest lithium mine is in America’s garbage drawers. It’s a reminder that Redwood is positioning itself to recycle a wide range of lithium-ion batteries, not just those that go into electric vehicles. Nonetheless, given Straubel’s long tenure at Tesla and his vast knowledge of the EV market, he is keeping a close eye on the growing EV market.

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As Straubel tore off the package containing an old laptop battery that had been shipped to Redwood Materials, he sized the pallet of old batteries stacked as high as his height. He estimates that there could be a billion batteries in old laptops, cellphones and cordless tools long forgotten in American homes.

“I’m a little surprised that some of the major OEMs (automakers) have taken maybe a little longer to be fully pivoted and pointed in that direction,” Straubel said. “I’m also a little surprised at the number of other successful and growing startups.”

Many of these start-ups have become publicly traded companies through PSPC mergers. Straubel thinks some of the startups are intriguing, but a few may have weak or questionable business plans. Which? Straubel won’t say it, but he has these words of caution for investors.

“Think calmly about the real business plan and the long-term potential,” he said.

TBEN’s Meghan Reeder contributed to this article.

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