Walk with JB Straubel through Redwood’s materials recycling plant in Carson City, Nevada, and highlight one thing: pallets stacked on top of pallets full of old batteries, faulty battery cells, and scrap material from Panasonic’s next plant.
“I think the sheer magnitude of the waste and waste problem and the amount of batteries that need to be recycled is shocking to most people,” said Straubel, founder and CEO of Redwood Materials. Straubel spent more than a decade at Tesla, before resigning as technical director in 2019 to be able to focus on the growth of his recycling company.
Redwood Materials has reached an agreement to recycle defective scrap and battery cells for Envision AESC, which manufactures batteries for the Nissan LEAF in Smyrna, Tennessee. It is the last step Straubel took in 2017 to supply battery manufacturers and car companies with scarce raw materials as the production of electric vehicles increases worldwide.
“We’re returning the materials to a very clean ground state and so there’s no loss of efficiency,” Straubel said. “You can’t really tell if there’s cobalt coming from an old battery or a mine.”
Cobalt, lithium, nickel and other minerals and metals used in EV batteries have become very hot commodities, so prices have risen to 52-week highs. Encouraging rising prices is the announced increase in the production of lithium-ion batteries, as carmakers from Tesla to General Motors and Ford will drastically increase electric vehicle plans over the next decade.
“To manufacture the batteries the world needs in ten years, the industry will need 1.5 million tonnes of lithium, 1.5 million tonnes of graphite, 1 million tonnes of quality nickel and 500,000 tonnes of quality manganese. The world produces less than a third of each of these materials today. New sources of battery materials are highly valued and desperately needed, “said Sam Jaffe, CEO of Cairn ERA, a consulting firm energy.
To return home, Jaffe notes that demand for U.S. lithium-ion batteries exceeded 43 megawatts an hour last year and will rise to 482 megawatts an hour by 2030.
Growth is great news for Panasonic, which manufactures battery cells at the Gigafactory that operates with Tesla in Sparks, Nevada. Thanks to its latest expansion, Gigafactory will produce just under 2 billion battery cells this year.
Allan Swan, who runs the plant, says even more production is needed. “Here in the United States, we certainly 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 that booming EV plans mean the industry should consider battery recycling as a new source of key minerals.
“It takes a lot of energy to extract these minerals and it makes absolutely no sense to dump them in the landfill,” he said. “We would be really foolish if we didn’t take advantage of the ability of older cells to create the next generation.”
Straubel and his Redwood team like to say that the largest lithium mine is in America’s junk drawers. It’s a reminder that Redwood is positioning itself to recycle a wide range of lithium-ion batteries, not just those that come in electric vehicles. However, given Straubel’s long tenure at Tesla and his extensive knowledge of the electric vehicle market, he is looking closely at the rapidly expanding electric vehicle market.
When Straubel opened the package with an old laptop battery that had been shipped to Redwood Materials, he lifted the pallet of old batteries stacked up to his waist. He estimates that there may be a billion batteries in old laptops, cell phones and long-forgotten wireless tools sitting around U.S. homes.
“I’m a little surprised that some of the big automakers (automakers) have taken a little longer to be completely pivoted and geared in that direction,” Straubel said. “I’m also a little surprised at the number of other successful and growing startups.”
Many of these emerging companies have become listed companies through SPAC mergers. Straubel believes some of the startups are intriguing, but some may have weak or questionable business plans. Which is? Straubel won’t say it, but he does have those words of caution for investors.
“Think calmly about the actual business plan and long-term potential,” he said.
CNBC’s Meghan Reeder contributed to this article.