Redwood Materials has entered into a substantial long-term contract to provide recycled materials to Toyota Motor for its forthcoming $13.9 billion electric vehicle (EV) battery facility in North Carolina, the company announced on Thursday.
Under the agreement, Redwood, renowned for its expertise in battery recycling, will repurpose EV battery components using materials sourced from Toyota and recycled from end-of-life vehicles, primarily hybrid-electric models like the Prius. The Nevada-based materials specialist did not disclose specific details regarding the value or timeline of the contract.
In an interview, J.B. Straubel, Redwood's Chief Executive and a co-founder of Tesla, expressed confidence that the contract would facilitate the growth of Redwood's business in alignment with Toyota's evolving requirements. “We want to be a solution for them for years to come,” Straubel stated, hinting at the potential expansion of Toyota's battery production facilities.
Straubel emphasized Redwood's commitment to building a closed-loop, or circular, battery ecosystem, with the goal of reducing EV costs by decreasing reliance on imported materials and mitigating environmental impact.
Redwood's ambitious plans include establishing an annual battery component production capacity of 100 gigawatt-hours in the U.S., capable of supplying over 1 million EVs per year, with future prospects to expand the capacity to 500 GWh.
The company, founded by Straubel in 2017, has raised $2 billion at a valuation of $5.25 billion and secured a $2 billion loan backed by the Department of Energy. Redwood intends to deliver battery components to Toyota from its Sparks, Nevada facility and, eventually, from a $3.5 billion facility under construction near Charleston, South Carolina.
Redwood will supply remanufactured cathode active material, produced from recycled lithium, nickel, and cobalt, as well as anode foil made from recycled copper. These components constitute a significant portion of the cost of current lithium-ion cells.
Numerous companies are strategically positioning themselves in North America to manufacture battery components, capitalizing on incentives provided by the U.S. Inflation Reduction Act and similar legislation aimed at curbing imports of batteries and materials from China.
Redwood has previously announced recycling agreements with Panasonic, Volkswagen, and Ford, while also supplying remanufactured battery components to Panasonic, which collaborates with Tesla in operating an EV battery plant in Nevada.