Redwood Materials, run by ex-Tesla CTO, raises $1 billion to expand recycling operations in U.S.

Redwood Materials, the battery and e-waste recycling startup based by former Tesla Chief Technology Officer JB Straubel, introduced Tuesday that it has closed a $1 billion funding spherical to develop operations within the U.S.

The firm takes spent electrical automobile batteries, breaks them down and makes use of the metals from them — together with nickel, copper, cobalt and lithium — to provide new parts that may go into EV batteries.

One of Redwood’s main objectives is to provide battery parts domestically to cut back a few of the world commerce and geopolitical dangers across the EV business. Redwood additionally goals to make use of as a lot recycled materials as doable to cut back the environmental impact the auto business transitions from inner combustion autos to battery electrics and hybrids.

While Redwood initially centered on recycling, it additionally engages in refining and re-manufacturing, and provides what it calls sustainably mined supplies into its merchandise as wanted, Straubel advised CNBC earlier this yr.

As CNBC beforehand reported, earlier this yr, Redwood locked in a $2 billion mortgage dedication from the U.S. Department of Energy. It plans to make use of its funding to develop operations within the U.S., together with in and past its base in Carson City, Nevada, and has introduced plans to construct a Battery Materials Campus outdoors Charleston, South Carolina.

U.S. Secretary of Energy Jennifer M. Granholm has recognized home manufacturing of batteries and parts as one technique to meet rising demand for EVs, generate jobs and speed up a transition from fossil fuels to renewable and clear vitality.

Fossil fuels are the dominant type of vitality utilized on the earth as we speak, and account for a majority of synthetic CO2 emissions and different poisonous air and particle pollution which can be driving local weather change and its results, together with extra frequent, extra excessive climate occasions.

According to the Energy Information Administration, regardless of the rising share of EVs on the street, gasoline, excluding gasoline ethanol, nonetheless accounted for 52% of complete vitality consumption by the U.S. transportation sector in 2022. 

North America’s battery manufacturing capability is anticipated to develop to just about 1,000 Gigawatt hours per yr by 2030, in line with analysis from Argonne National Laboratory.

For its new progress funding spherical, Goldman Sachs Asset Management, Capricorn’s Technology Impact Fund and different unnamed funds suggested by T. Rowe Price Associates led the deal, in line with an organization assertion. The sequence D spherical of fairness funding brings Redwood’s complete capital raised to just about $2 billion. OMERS, heavy gear maker Caterpillar Inc., Microsoft’s Climate Innovation Fund and Deepwater Asset Management additionally invested within the spherical.