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Ford to Partner with Tesla Co-founder's New Startup Redwood Materials on EV Battery Recycling & U.S. Supply Chain

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【Summary】​Ford Motor Company and EV battery recycling startup Redwood Materials, a company founded by Tesla co-founder J.B. Straubel, announced a new partnership to build out a electric vehicle battery recycling operation and establish a domestic battery supply chain. Ford and Redwood’s collaboration will integrate battery recycling into Ford’s domestic EV battery strategy, as the automaker develops more purely electric vehicles.

Eric Walz    Sep 22, 2021 7:00 AM PT
Ford to Partner with Tesla Co-founder's New Startup Redwood Materials on EV Battery Recycling & U.S. Supply Chain
By early 2022, Redwood Materials will announce a site for its North American battery materials manufacturing facility. (Photo: Redwood Materials)

Ford Motor Company and electric vehicle battery recycling startup Redwood Materials today announced a new partnership to build out electric vehicle battery recycling operation and establish a domestic battery supply chain. Ford and Redwood's collaboration will integrate battery recycling into Ford's domestic EV battery strategy, as the automaker develops more purely electric vehicles like the Mustang Mach-E and Ford F-150 Lightning. 

The goal of the partnership is to make electric vehicles more sustainable and drive down the cost for batteries by creating a closed-loop recycling ecosystem for the valuable raw materials used in EV battery production. It will also help Ford reduce reliance on imported EV batteries and mining of raw materials, which can also help to lower costs. 

"Ford is making electric vehicles more accessible and affordable through products like the all-electric F-150 Lightning, Mustang Mach-E and E-Transit, and much more to come," said Jim Farley, Ford president and CEO. "Our partnership with Redwood Materials will be critical to our plan to build electric vehicles at scale in America, at the lowest possible cost and with a zero-waste approach."

Redwood Materials was founded by J.B. Straubel, who co-founded Tesla with Martin Eberhard and Marc Tarpenning. Straubel was Tesla's first Chief Technical Officer and fifth employee. He worked for Tesla until 2019. Now he has big plans for his battery recycling startup Redwood Materials which he founded in 2017. 

Speaking at a conference in Oct 2020, Straubel said he wants to build Redwood Materials into "the world's top battery recycling company." The company is based in Nevada.

In 2019, Tesla's battery partner Panasonic entered into a partnership with Redwood Materials to reclaim the scrap it generates in making battery cells at Tesla's gigafactory in Nevada. Currently  all of the scrap materials left over from battery production is shipped to Redwood for recycling.

Redwood's EV battery recycling technology can recover, on average, more than 95% of the elements like nickel, cobalt, lithium and copper. Once recycled these materials can be reused to produce anode copper foil and cathode active materials for future battery production. 

"Increasing our nation's production of batteries and their materials through domestic recycling can serve as a key enabler to improve the environmental footprint of U.S. manufacturing of lithium-ion batteries, decrease cost and, in turn, drive up domestic adoption of electric vehicles," said Straubel. "Redwood and Ford share an understanding that to truly make electric vehicles sustainable and affordable, we need to localize the existing complex and expensive supply chain network, create pathways for end-of-life vehicles, ramp lithium-ion recycling and increase battery production, all here in America."

By using locally produced, recycled battery materials, Ford can drive down battery costs, increase battery materials supply and reduce its reliance on imports and mining of raw materials.

The high cost of EV batteries remains a barrier to widespread EV adoption in the U.S. Although battery production costs have fallen significantly over the years, it still costs automakers roughly $140 for each kWh of battery power. Tesla's Model 3 Standard Range Plus, for example, comes with a 54 kWh battery pack.

Ford is investing more than $30 billion in electrification through 2025, including the collaboration with Redwood, which will help deliver on the company's plans to localize the battery supply chain.

The partnership builds on Ford's joint venture with battery Maker SK Innovation called BlueOvalSK to produce electric vehicle batteries at scale. The new joint venture was announced one day after Ford unveiled its F-150 Lightning Pro electric pickup in May.

Ford plans to scale battery production at multiple BlueOvalSK battery plants in North America starting mid-decade. 

Last week, Redwood announced it will produce strategic battery materials, supplying anode copper foil and cathode active materials to U.S. partners. Redwood plans to transform the lithium-ion battery supply chain by offering large-scale sources of these domestic materials to reduce the cost and environmental footprint of electric vehicle production. 

Ford and Redwood's long term plans include working together on the best approach to collect and disassemble end-of-life batteries from Ford's electric vehicles for recycling and remanufacturing to help reduce the cost associated with battery repairs, as well as the costs of raw materials to manufacture all-new batteries.

"Our work with Redwood will, by design, help ensure the infrastructure is in place to cost-effectively recycle end-of-life Ford batteries to create a robust domestic materials stream and drive down the cost of electric vehicles," said Lisa Drake, Ford's North America Chief Operating Officer.

As part of the new partnership, Ford invested $50 million into Redwood Materials to help the company expand its footprint in the U.S.

In July, Redwood Materials announced a $700 investment, which it will use to build a battery materials factory in the U.S. 

Redwood will announce a site for its North American battery materials manufacturing facility by early 2022 the company said. The plant will produce up to 100 GWh/year of cathode active materials and anode foil, which is enough for one million electric vehicles by 2025. 

By 2030, Redwood expects its output to scale to 500 GWh/year, which is enough to build batteries to power five million electric vehicles.

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