Written by / Ma Xiaolei
Edited / Meng for
Design / Shi Yuchao
Source/Forbes By Alan Ohnsman
If in the future every car were electric and everyone was driving an electric car, what would you think?
In the eyes of JB Straubel, one of Tesla's former chief technology officers and founders, this would be a market with unfathomable profits, as he would recycle valuable metals from all those batteries.
Redwood Materials, founded by Straubel near the Tesla Gigafactory in Carson, Nevada, has become a leading supplier of recycled materials for batteries by recycling recycled metals and materials from batteries, battery waste and electronics.
With growing demand for electric vehicle batteries and the expensive raw materials needed to make them, the company has raised about $800 million to expand its recycling operations.
Now, Panasonic, Tesla's earliest major battery partner, will use materials recycled from Redwood Materials to make Tesla batteries to produce lithium-ion batteries in a more sustainable "closed-loop" fashion.
From Panasonic to Panasonic
On January 4, Panasonic said at CES that Redwood Materials has collected and recycled used battery parts from Panasonic, and starting in 2022, they will supply Panasonic copper foil refined and produced from these waste recycled materials to make new lithium-ion batteries at Tesla's Gigafactory in Sparks, Nevada.
Allan Swan, president of Panasonic Energy North America, said that as production grows since 2020, reusing scrap and old batteries can ensure that Panasonic achieves its goal of sustainable production.
Redwood also responded: "Panasonic's use of copper foil from recycled materials will be the first such closed-loop battery production process, where the battery is recycled, remanufactured and returned to the same factory." ”
Now, they are creating a circular supply chain for electric vehicles and clean energy products in the U.S. mainland, making it more sustainable and driving battery costs down.
In September 2021, Redwood Materials announced that it would invest $1 billion to build a plant to produce cathode and anode materials for electric vehicle batteries starting in 2025.
Currently, Panasonic produces about 2 billion batteries a year at Tesla's factory.
"And, just as production has expanded, the biggest opportunity lies ahead of us." Swann said, "As the number of electric vehicles increases, it is expected to grow 5 times over the next decade. ”
Inspiration from Tesla
Strawbel and Elon Musk met in 2003 because they were both interested in electric aviation.
At the time, Straubel was working at Vlacom, a Los Angeles-based aviation startup, where he co-founded a hydrogen-electric power system for high-altitude aircraft.
Straubel joined Tesla in 2004 and is a co-founder of Tesla with Musk and three others as chief technology officer, winning dozens of patents for Tesla's electric motor and battery powertrains.
The high-profile Musk became the face of the Tesla brand, but the taciturn Straubel created most of its core technology.
In July 2019, Musk announced Straubel's departure on an earnings call, summing up the low-key engineer's contribution. "I would like to thank JB for the fundamental role it played in creating and building Tesla. If we hadn't had lunch in 2003, there wouldn't have been a Tesla. ”
It was during Tesla's work, 5 years ago, when Tesla's Gigafactory in Nevada was about to increase battery production, that Straubel suddenly had inspiration.
Why not set up a company to recycle metals from factory scrap and other scrap electronics and turn them back into usable lithium, cobalt and graphite to make new batteries?
As long as the cost is low enough and the scale is large enough, it will have an impact on the entire industry, promoting the supply of rare and expensive metals, while mitigating the environmental harm of mining and avoiding battery landfills.
So he founded Redwood Materials in Carson, near the Gigafactory.
Initially, Straubel made Redwood Materials an affiliated project with Tesla and discussed it with Musk. Musk said that as long as it does not disperse the main business, it will support it.
"Tesla has its own recycling programs, but those programs are designed to support the company's operations and are very low in priority." Straubel said.
As a result, Straubel left Tesla in 2019 to focus on the Redwood Materials project.
Wealth in old batteries
In 2021, Straubel, 45, said, "Everything is moving forward in electrification and the demand for batteries is very high." Our mission at Tesla is to catalyze and ignite all the excitement about electric vehicles. Now it's come true, but it's happening faster than the entire supply chain can keep up with it. ”
In 2021, Tesla delivered about 936,000 electric vehicles, each requiring thousands of lithium-ion batteries. As giants such as GM and Volkswagen and electric startups such as Lucid and Rivan are actively pursuing electric vehicle programs, the demand for batteries has increased further.
The prices of core battery materials such as lithium and cobalt are skyrocketing. After just one year of operation, Redwood Materials was able to "salvage" tons of usable metal at a lower cost than traditional mining.
While Straubel is tight-lipped about Redwood Materials' financials, it's estimated that the company's revenue could be around $20 million.
In July 2020, Redwood Materials raised $40 million from Amazon, Breakthrough Energy Ventures and Palo Alto-based Capricorn Investment Group.
According to PitchBook, its total external funding at the time reached $48 million, valued at $217 million. Straubel is likely to reinvest millions of dollars out of his own pocket, valuing his fortune at $900 million.
The company's current scale is to recycle material for 45,000 electric vehicle battery packs per year. According to benchmark mineral intelligence estimates, each battery pack is worth about $2,000 in commercial metal and generates $90 million in revenue.
Straubel▼
Straubel estimates that the surge in battery demand will eventually create a recycling market worth hundreds of billions of dollars a year. "When every car is electric and the batteries of all the cars and trucks in the world need to be recycled, it's not hard to calculate the value of the industry."
In the United States, the Biden administration has called for a series of incentives to encourage consumers to abandon gasoline vehicles and switch to electric vehicles, and to significantly increase domestic production of electric vehicles.
"Whether it's setting up a new electric car company or building a new gigabit factory, the question is ignored, where does the material come from?" Straubel said.
UK Benchmark Mining Intelligence estimates that demand is expected to reach 1.1 MWh by 2027, an eight-fold increase in just 7 years.
Electric vehicles are still a small segment in the U.S., accounting for about 2 percent of new car sales in 2020, but that's about to change. The Boston Consulting Group predicts that electric vehicles could account for more than half of global passenger car sales as early as 2026, four years ahead of its previous forecast.
Invisible value
In addition to being able to ease supply, Straubel's company can also help solve the "secret that cannot be said" in the electric vehicle industry, that is, electric vehicles are not as environmentally friendly as most people think. About 19 percent of U.S. electricity is still generated by burning coal, and mining battery raw materials is a polluting business and the working environment is terrible.
In July 2020, Pamela Coke-Hamilton, executive director of the International Trade Center, a joint agency of the United Nations Conference on Trade and Development and the World Trade Organization, said in a note that "most consumers only know the environmentally friendly side of electric vehicles." The dirty side of the production process is invisible. ”
For example, most of the lithium metal comes from the salt pans of Australia, Argentina, Bolivia and Chile, where water supplies are inadequate. According to a 2020 United Nations study, mining in the Andes region of South America means pumping large amounts of groundwater, which reduces water supplies to farmers and pastoralists.
The same study noted that large quantities of cobalt came from black mines in Congo that employed tens of thousands of child laborers. Dust from nickel ore can contain uranium and other toxic substances that can cause respiratory illness and birth defects.
The Atacama Salt Pan, located in Chile's Andes Mountains, is one of the largest lithium-salt reserves in the world. To produce car batteries, large amounts of groundwater need to be pumped from one of the driest regions in the world to extract lithium.
Straubel said, "The traditional mining industry itself is also inefficient. The whole process is to find a deposit, dig out the lithium, refine it, and then dispose of it. Fundamentally, this is exhaustive and unsustainable. ”
It's just getting started
2020 is redwood Materials' first full year of operation, and it has processed 10,000 tons of waste from Panasonic and Envision AESC, as well as battery-containing e-waste from Amazon.
Straubel had expected the company to dispose of twice as much scrap in 2021 as it would in 2020, as it also began sourcing used batteries (and solar panels) from Eri, North America's largest e-waste recycler, and Proterra, an electric bus maker.
Every day, Redwood Materials receives semi-truckloads of used batteries, cell phones and electronics containing lithium-ion batteries and converts them back into usable metal alloys
Every day, semi-truckloads of used batteries are sent to Redwood Materials for manual sorting. The company has a proprietary water chemistry process to separate out various metals.
The flammable battery electrolyte will self-burn under closed conditions and will not release any emissions. "We basically dismantle these things chemically and separate out useful materials that use as the cornerstone of manufacturing."
Straubel said, "Both energy and transport have received a lot of impetus and attention in terms of sustainability. The materials and mining industries have not yet focused on sustainability. I believe it is coming. It has to come. ”