Walk with JB Straubel through the Redwood Materials recycling plant in Carson City, Nevada, and one thing stands out: pallets on top of pallets filled with old batteries, defective battery cells, and waste materials from the nearby Panasonic plant.
“The scale of the waste and scrap problem and the range of batteries that need to be recycled is, in my opinion, shocking to most people,” said Straubel, founder and CEO of Redwood Materials. Straubel spent more than a decade at Tesla before resigning as chief technical officer in 2019 so he could focus on growing his recycling business.
Redwood Materials has reached an agreement to recycle waste and defective battery cells for Envision AESC, which manufactures batteries for the Nissan LEAF in Smyrna, Tennessee. This is the latest move for the company that Straubel started in 2017 to shorten raw materials for batteries and automotive businesses as EV production increases worldwide.
“We bring the material back to a very clean and kind of fundamental condition so that there is no loss of efficiency,” Straubel said. “It’s actually indistinguishable whether cobalt comes through an old battery or from a mine.”
Cobalt, lithium, nickel and other minerals and metals used in EV batteries have become very hot products, so hot that prices have risen to 52-week highs. The increase in prices is an announced increase in lithium-ion battery production, as automakers from Tesla to General Motors and Ford dramatically increase EV plans over the next decade.
“To supply the batteries the world needs in ten years’ time, the industry will need 1.5 million tonnes of lithium, 1.5 million tonnes of graphite, 1 million tonnes of battery-quality nickel and 500,000 tonnes of manganese-grade batteries. as a third of each of these materials today. New sources of battery material are highly valued and much needed, “said Sam Jaffe, managing director of Cairn ERA, an energy consulting firm.
Jaffe points out that US demand for lithium-ion batteries was 43 megawatts-higher last year and would climb to 482 megawatts by 2030.
The growth is fantastic news for Panasonic, which manufactures battery cells at the Gigafactory it operates with Tesla in Sparks, Nevada. Thanks to the latest expansion, the Gigafactory will produce just under 2 billion battery cells this year.
Allan Swan, who manages the plant, says more production is needed. “Here in the United States, we probably need four, five, six of these factories to support the automotive industry,” he said.
Celina Mikolajczak, vice president of engineering and battery technology at Panasonic Energy North America, believes the thriving EV plans mean the industry needs to look at battery recycling as a new source of important minerals.
“A lot of energy is spent on the extraction of these minerals and it makes absolutely no sense to dump them,” she said. “We would be really foolish if we did not harness the capacity of older cells to create the next generation.”
Straubel and his team at Redwood like to say that the largest lithium mine is in the trash cans of America. It’s a reminder of Redwood’s position to recycle a wide range of lithium-ion batteries, not just those used in electric vehicles. Given Straubel’s long term in Tesla and his extensive knowledge of the EV market, he still keeps an eye on the fast growing EV market.
While Straubel tore open the package with an old laptop battery sent to Redwood Materials, he piled the pallet of old batteries as high as his waist. He estimates that there may be a billion batteries in old laptops, cell phones and long-forgotten wireless tools around American homes.
“I’m a little surprised that some of the big OEMs (car manufacturers) may have taken a little longer to turn completely in this direction,” Straubel said. “I’m also a little surprised at how many other successful and growing businesses there are.”
Many of the businesses traded in public through SPAC mergers. Straubel believes some of the new ventures are intriguing, but some may have weak or questionable business plans. Which one? Straubel does not want to say, but he does have this warning word for investors.
“Think calmly about the real business plan and the long-term potential,” he said.
CNBC’s Meghan Reeder contributed to this article.