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Valuable raw materials are hidden in this pile of electronic
waste
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Used batteries are sorted at the recycling specialist and Redwood Materials competitor Li-Cycle
Photo: Christinne Muschi / Bloomberg / Getty Images
For more than a decade, Tesla co-founder JB Straubel was Elon Musk's most important comrade: As Chief Technology Officer, the Stanford graduate was responsible for the technical design of Tesla vehicles, evaluated new technologies, checked the technology of suppliers and took important vehicle components away. In July 2019, he resigned from his position and has been working as a consultant for Tesla ever since, while he also founded another company in 2018: Redwood Materials, which specializes in recycling electric vehicle batteries.
Now Straubel can really get started with Redwood: The recycling start-up with just 130 employees has now raised more than 700 million US dollars in a financing round.
Redwood is said to be worth a good 3.7 billion dollars, reports the "Financial Times" ("FT"), citing insiders.
Redwood's ultimate goal is to create a "closed electric car supply chain" in the US - by replacing or reusing materials from lithium-ion car batteries.
This should minimize the often environmentally harmful digging for new raw materials for the batteries.
The extraction of lithium, cobalt or even rare earths is not only considered by environmentalists to be energy-consuming, polluting and sometimes takes place under highly questionable working conditions.
For the future of batteries, it is crucial to bring supply chains to the USA as well, Straubel told the "FT".
If this does not succeed, there is a risk that the USA will lose this "entire transport market".
Political interest in recycling of battery raw materials is growing in the USA
Redwood uses a combination of pyro- and hydrometallurgical processes for recycling.
Smaller parts of the battery components are "burned" to extract metals such as cobalt from the metal mixture.
A large part of the valuable raw materials is extracted from the used batteries with the help of acids or other solvents.
The start-up has already entered into partnerships with Amazon and Tesla's Gigafactory battery partner Panasonic for the recycling of their "electronic waste". And it moves in a politically sensitive field: In the USA and Europe, there is growing concern about raw material dependency on China, especially for materials for batteries. According to the industry service Bloomberg New Energy Finance, 80 percent of the corresponding raw material processors, 77 percent of the world's battery cell capacity and 60 percent of the global component production for the production of e-cars are currently made by Chinese companies.
This is one of the reasons why the USA is interested in recyclers like Redwood.
According to the expansion plans announced just over a month ago, Straubel's company plans to employ around 500 additional employees.
Redwood currently employs just 130 people.
In addition, Redwood recently purchased a large area in the Tahoe-Reno industrial area in Nevada - in the immediate vicinity of Tesla's first "Gigafactory" battery factory.
Straubel recently described the current state of Redwood Materials as "Model S" in Tesla's internal jargon.
He indicated that his recycling company has already developed the most important technologies for recycling and is now about to scale up.
The field of recycling specialists is forming
The latest giant round of financing was led by the T Rowe Price hedge fund - with the support of the investment bank Goldman Sachs and the Baillie Gifford fund.
So Straubel was able to attract a group of well-known venture financiers for his recycling company.
Now, however, the pressure is high that his techniques for recycling battery raw materials will work on a larger scale - and that he will also make a profit with it.
The field of electric car battery recyclers is forming, as a detailed article in the "Economist" (available here for m + subscribers) shows: In North America, the Canadian start-up Li-Cycle is currently the largest battery recycler.
The US lithium specialist American Battery Technology is setting up its own recycling division.
And a lot is happening in Europe too.
For example, VW's battery partner Northvolt wants to build a recycling plant in addition to its battery factory in Sweden.
Volkswagen has set up a pilot plant for battery recycling in Salzgitter.
In China, the world's largest battery cell manufacturer CATL has founded a recycling subsidiary with Brunp.
China's Ganfeng, one of the world's largest lithium producers, has also entered the raw material recycling business and is already planning to build a second recycling factory in Mexico.
And Korean companies are also pushing into the potentially lucrative business.
So it's no wonder that Straubel is currently not having too much trouble raising a lot of money.
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