Tesla co-founder announces plans for giant US EV battery plant

Redwood Materials is looking to build a massive battery materials manufacturing site in the US, aiming to produce 100 gigawatt-hour per year of cathode active materials for one million electric vehicles by 2025 to support the growing US EV market, the company said Sept. 14.

Started by Tesla co-founder JB Straubel, the company, which has primarily been a recycling firm, is looking to create a circular supply chain for EVs and clean energy products in North America as more than 80% of global production of battery components and materials is currently sourced from China.

Redwood, which expects to announce a site for the US facility by early 2022, has set an ambitious goal to scale production to 500 GWh/year of cathode active materials, enabling enough batteries to power 5 million EVs, or nearly half of the US' annual vehicle production by 2030.

"To make electric vehicles and energy storage products fully sustainable and affordable we need to actually close the loop at their end of life," the company said in a statement. "This means not just collecting and recycling the batteries but also continuing further, fully refining the materials we recover and then manufacturing them back into precision battery materials to use those raw materials again."

Redwood said it will produce strategic battery metals in the US, supplying battery cell manufacturing partners with anode copper foil and cathode active materials. Redwood plans to offer large-scale sources of these domestic materials produced from as many recycled batteries as available and augmented with sustainably mined material, it said.

"These materials will be built from more and more recycled batteries every year but in the immediate future, we need to ramp EV production faster than the number of existing EVs will reach end of life and therefore, be available for recycling," Redwood said. "This is the only way we can scale these critical building blocks to meet the US' 2030 electrification goals."

US battery metal supply lagging demand

President Joe Biden signed an executive order Aug. 5 aimed at having half of all domestic vehicle sales be zero-emissions by 2030 with the three largest US automakers – Ford, General Motors and Stellantis – signing voluntary pledges to achieve sales of 40% to 50% of annual US volumes of electric vehicles by 2030.

However, a large hurdle to Biden's push for electrification is battery and mineral supply as much of the current supply chain of cathodes and other EV materials is concentrated in China.

Imports of lithium materials into the US have been decreasing in recent years, though imports of both refined and processed lithium picked up pace in the second quarter as most lithium extraction, processing and refinement occur outside the country.

The US' reliance on lithium imports -- both processed and refined lithium -- reflects relatively undeveloped US production and manufacturing base for the metal, despite efforts to promote domestic production. US electric vehicle and electronics manufacturers instead import finished batteries, while much of the country's lithium imports go toward industrial uses, according to an analysis by S&P Global Market Intelligence.

Second-quarter imports of lithium-ion batteries for electric vehicles boomed, jumping 47.8% year on year, according to Panjiva data.

The US lags at all stages of the supply chain, including lithium-ion cell production, with 12 "battery [gigafactories]" in operation, according to Benchmark Mineral Intelligence. Tesla operates a battery plant in Sparks, Nevada and a pilot plant in Fremont, California. Battery makers LG Energy Solution, SK Innovation, and Envision AESC own battery plants in the country too.

By comparison, China hosts 156 battery gigafactories.