DOE to lend $2B for Redwood battery plant
Metal Tech News - February 9, 2023
Last updated 2/21/2023 at 5:47pm
Loan will support US plant capable of producing EV battery materials at the giga-scale.
Toward the White House's goal of zero-emission vehicles making up half of all car sales in the U.S. by 2030, the U.S. Department of Energy has conditionally committed to lend $2 billion to Redwood Materials Inc. to support the expansion and construction of a battery recycling and manufacturing complex in Nevada.
Announced on Thursday via the DOE Loan Programs Office, Redwood will use the funding to build and expand its battery recycling facility outside Reno, Nevada.
"In order to meet the needs of the rapidly growing EV market, the United States will need to expand battery recycling capabilities, as well as grow our domestic capacity for producing battery precursor materials," Jigar Shah, director of DOE's Loan Programs Office, penned in a post about the new loan agreement. "By lowering the cost of the critical materials for lithium-ion batteries using recycled materials, electric vehicles can become more accessible to lower income communities."
Using end-of-life batteries out of electric vehicles and consumer electronics, as well as new materials, as feedstock, Redwood's expanded facility will churn out copper foil and cathode-active materials for new EV battery cells.
DOE's confidence in loaning Redwood the money for the Nevada plant was bolstered by a November agreement to supply cathode material for long-time partner Panasonic's planned lithium-ion battery cell plant in Kansas, which is slated to begin production in 2025.
You can read about the Redwood-Panasonic deal at Redwood materials for Panasonic US plant in the November 16, 2022 edition of Metal Tech News.
Right now, Panasonic imports almost all of the cathode material used in the production of battery cells at its plant in Sparks, Nevada. The facility also supplies cells to the Tesla gigafactory, which manufactures battery packs that power Tesla vehicles across the country.
In July, Panasonic announced it would build a $4 billion battery plant in DeSoto, Kansas, of which the new facility will use high-nickel cathode supplied by Redwood when production starts in 2025.
To help Redwood complete the upgrade and expansion of its Nevada facility, it has been endeavoring for quite some time for a loan from DOE.
"We have been working closely with the Loan Programs Office for more than a year and have undergone an extensive diligence process that thoroughly reviewed our technology, our ability to repay the loan, product demand, and dozens of other factors to get to this stage," the company penned in the announcement.
In addition to the $2 billion federal loan, Nevada has also provided approximately $105 million in state incentives for the upgrade.
The expansion of its battery material facility in Nevada, which has been producing anode copper foil since last month, is expected to create roughly 3,400 new jobs and directly employ roughly 1,600 full-time employees.
Ultimately, Redwood expects the completed facility to produce 100 gigawatt hours annually of ultra-thin battery-grade copper foil and cathode-active materials from both new and recycled feedstocks at gigafactory-scale in the US for the first time. This should provide enough battery materials for more than 1 million EVs annually.
"DOE's support for this project represents a critical milestone in the United States' commitment to establishing a domestic battery supply chain rooted in manufacturing and American innovation," the company wrote. "By localizing this critical supply chain and producing anode and cathode components at a gigafactory-scale in the US for the first time, Redwood is addressing perhaps the most important supply chain need in electrification and ensuring that the United States can deliver on its clean energy and sustainable transportation plans."
While Redwoods are best known for their deep roots along the West Coast, the battery materials recycling and manufacturing company that adopted their name is planting the seeds of a clean energy electric ecosystem for future generations with the giant facility it is building in Nevada and a recycling and re-manufacturing complex planned for South Carolina.