Ex-Tesla CTO’s Redwood Materials secures $1 billion to expand U.S. recycling operations

On Tuesday, Redwood Materials, a startup that recycles batteries and e-waste, revealed that it had raised $1 billion in funding. The money will be used to expand the company’s operations throughout the United States.

The organization recycles used electric vehicle batteries by extracting metals, such as nickel, copper, cobalt, and lithium, and utilizing them to create new components for EV batteries.

Redwood has set a significant objective of manufacturing battery components domestically to mitigate some of the global trade and geopolitical risks associated with the electric vehicle industry. The company also strives to utilize as much recycled material as possible during the transition from internal combustion vehicles to battery electrics and hybrids to minimize the automobile industry’s environmental impact.

According to CNBC, Redwood, a company initially focused on recycling, is also involved in refining, re-manufacturing, and adding sustainably mined materials into its products as needed. Earlier this year, the company secured a $2 billion loan commitment from the U.S. Department of Energy, which it plans to use to expand operations in the United States, including beyond its base in Carson City, Nevada. Redwood has also announced plans to build a Battery Materials Campus outside Charleston, South Carolina.

Jennifer M. Granholm, the Secretary of Energy in the United States, has suggested that producing batteries and their components domestically could help satisfy the growing demand for electric vehicles while creating job opportunities and speeding up the shift from fossil fuels to renewable and clean energy.

Currently, fossil fuels are the world’s most widely used energy source. They are also responsible for significant artificial CO2 emissions and other harmful air and particle pollutants, which contribute to climate change and its associated consequences, such as more frequent and severe weather events.

As per the Energy Information Administration, in 2022, gasoline, excluding fuel ethanol, made up 52% of the total energy consumption by the U.S. transportation sector, despite the increasing number of electric vehicles on the road.

Argonne National Laboratory Research predicts North America’s battery manufacturing capacity will reach almost 1,000 Gigawatt hours annually by 2030.

Redwood has raised nearly $2 billion in its latest growth funding round. The series D round of equity funding was led by Goldman Sachs Asset Management, Capricorn’s Technology Impact Fund, and other undisclosed funds advised by T. Rowe Price Associates. The deal also saw investments from heavy equipment maker Caterpillar Inc., OMERS, Microsoft’s Climate Innovation Fund, and Deepwater Asset Management. The funding is expected to support the company’s continued growth and expansion.