A Tesla founder started an EV battery recycling company that's on pace to make $200 million a year
Tesla cofounder JB Straubel has been making waves with his electric vehicle (EV) battery-recycling startup, Redwood Materials. During a recent interview with The Wall Street Journal, Straubel revealed the company is expected to generate around $200 million this year. Launched back in 2017, Redwood Materials aims to create what he calls a "remanufacturing economy". This means they focus on extracting valuable raw materials from used batteries and recycling them for reuse, significantly contributing to sustainability efforts within the EV industry.
A remarkable aspect of Redwood Materials is its success at recycling batteries. The company has reportedly extracted enough nickel and lithium to produce battery materials equivalent to about 250,000 electric vehicles. Straubel's ambitious vision involves ramping up this operation to manufacture materials sufficient for one million EVs annually.
Despite the promise of innovation, it’s important to note the current state of the electric vehicle market. JD Power reports indicate mixed sales performance for EVs, especially compared to other markets like China, where about 27% of new vehicle sales were electric. While President Biden has emphasized the importance of EV adoption with incentives like the $7,500 tax credit, hesitations still loom, particularly among U.S. consumers. A June study by McKinsey & Company found 46% of surveyed EV owners would likely revert to gasoline-powered vehicles due to concerns over charging convenience, costs, and inadequate infrastructure.
Meanwhile, the UK is also making strides, with companies like Altilium leading the charge to establish battery recycling capabilities. Recently, Altilium began processing lithium-ion battery waste at its new ACT 2 recycling facility located in Plymouth. This facility is part of a larger plan to develop megascale recycling operations, aiming to transform the recycling industry within the UK.
The size of the Plymouth facility is notable—it can process the equivalent of one electric vehicle battery, about 300 kilograms of black mass waste, and is part of Altilium's push to build out its processing capabilities to handle increasing amounts of battery waste. Their pilot program showed substantial success, as they could recover over 95% of key minerals from used batteries.
Altilium's approach involves recovering these resources to bolster the UK's domestic supply chain for EV batteries, minimizing dependence on imported materials. They aim to support British manufacturing by establishing responsible recycling protocols which align with waste management principles encompassing reuse, repurposing, and recycling.
Demand for EV batteries is projected to rise sharply, particularly with requests for over 150,000 tonnes of cathode active material anticipated by 2035 to meet production targets for approximately 1.2 million EVs. Technical advancements are paving the way for these companies to sustainably extract and repurpose battery materials.
Industry leaders like Straubel are incredibly optimistic. They envision battery recycling becoming increasingly prevalent, helping to form the backbone of the EV supply chain. Straubel noted, “Every year, the recycled content in batteries increases,” which suggests this market will continue to adapt as it grows.
Yet, there's still much room for development; according to Grand View Research, the global battery recycling market is currently valued at $1.83 billion and is expected to skyrocket with the rapidly growing transition to electrification. The industry anticipates growth driven by increased electric vehicle adoption and the need to mitigate mining for materials.
Again, factors like the volume of end-of-life batteries and the presence of efficient recycling technologies are clearly pivotal to market expansion. Presently, only about 2% of vehicles on the roads are electric, indicating significant potential for wider battery recycling adoption as the number of EVs on the road increases.
Straubel emphasizes the broader goals of sustainability by highlighting the circular economy principles within the battery industry. He states, “We shouldn’t just discard batteries. Instead, we should reprocess them to reclaim the necessary materials for new ones.” This statement encapsulates the movement toward reducing mining activities and promoting recycling solutions to lower carbon footprints associated with battery production.
The industry is undoubtedly at the beginning of this exciting growth phase. The collaboration between innovators like Redwood Materials and Altilium is key to developing circular processing schemes where batteries are constantly reused within the supply chain. There’s plenty of work to be done, but as the vision for future battery recycling crystallizes, it's clear the industry must prioritize sustainability and innovation moving forward.