WASHINGTON (AP) — A Nevada company that recycles batteries for electric vehicles has won a $2 billion green energy loan from the Biden administration.
Redwood Materials, a recycling venture founded by the former chief technology officer at Tesla Inc. secured a conditional loan from the Energy Department's Advanced Technology Vehicles Manufacturing program, w hich helped Tesla more than a decade ago.
Energy Secretary Jennifer Granholm announced the grant Thursday during a visit to Redwood’s facility in Nevada with Gov. Joe Lombardo.
"If finalized, this $2 billion loan is going to help Redwood complete this project to produce critical components for EV batteries,'' Granholm said.
“It’s going to be a slam dunk for our domestic, burgeoning electric vehicle industry, providing these battery components for more than a million electric vehicles every year,'' she added.
Battery recycling will help the U.S. establish its own electric-vehicle supply chain, a major goal of the Biden administration as it seeks to move away from gas-powered cars in the larger fight against climate change.
The Energy Department said its conditional commitment demonstrates its intent to finance the project, but several steps remain for the project to reach critical milestones and certain conditions must be satisfied before officials approve a final loan.
Redwood Materials was founded in 2017 by Jeffrey “JB” Straubel, Tesla’s former chief technology officer. It now has more than 300 employees who recycle used batteries and has supply contracts with Ford and with Panasonic, which makes batteries for Tesla.
CEO Straubel said the company already has more material than it can process from spent consumer batteries from lawnmowers, cellphones and toothbrushes, as well as production scraps from lithium-ion battery manufacturing.
The company says it can recover more than 95% of the elements in a spent battery, including lithium, nickel, cobalt, manganese, and copper. The metals are then used to make anode and cathode components for new battery cells.
Redwood Materials “is going to play this outsized role in bringing the batteries supply chain home — because you’re focused on the pieces that we don’t have in the United States,'' Granholm told employees at Thursday's event. “You guys are making history in this.''
Lombardo, a Republican who took office last month, said he was a latecomer to negotiations on the project but is a strong supporter.
"This is awesome,'' he said.
Redwood recently announced p lans to build a $3.5 billion battery manufacturing and recycling factory in South Carolina. The Carson City, Nevada-based company plans to pull out key components of batteries and reuse them to make electrodes for electric vehicles.
The DOE loan is targeted for construction and expansion of a battery materials campus in McCarren, Nevada, that will support the growing electric vehicle market in the U.S. Once fully operational, the project would be the first domestic facility to support production of anode copper foil and cathode active materials a lithium-ion battery manufacturing process. The process would recycle end-of-life battery and production scrap and remanufacture it into critical materials, the Energy Department said in a blog post.
Redwood Materials is expected to create about 3,400 construction jobs and employ about 1,600 full-time workers, the department said.
Redwood said in a statement that it expects to produce 100 gigawatt hours annually of ultra-thin battery-grade copper foil and cathode-active materials from both new and recycled material in the United States. That's enough to produce more than a million electric vehicles a year, the company said.
Straubel, Redwood’s CEO, told The Associated Press last year that recycling battery materials will help the U.S. establish its own electric-vehicle supply chain.
“Redwood fills a critical gap in that whole piece, and our goal is to close the loop on all the materials that we’ve already mined and produced into products, keep them in the regions where they were bought and are being used,'' Straubel told the AP. "Every battery that we can recycle is one battery worth of materials that we don’t need to mine again. So we’re aiming to both fill a raw-material gap from the recycling and also fill a supply-chain gap.''
The Energy Department said the project will help meet President Joe Biden's goal to promote domestic critical materials recycling and manufacturing. "Domestic production of these battery components is paramount to our national security, building our supply chain, and strengthening our economy long-term,'' the department said in a statement.
Using recycled materials will help improve U.S. energy security and enable the growth of reliable, large-scale U.S.-based EV battery cell production, the department said.
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Associated Press auto writer Tom Krisher in Detroit contributed to this story.