Redwood Materials, led by former Tesla CTO, raises $1 billion to expand recycling activities in the US
JB Straubel sits down with CNBC's Phil LeBeau at Redwood Materials.
Redwood Materials, the battery and e-waste recycling startup he founded Tesla Chief Technology Officer JB Straubel, announced on Tuesday that the company has closed a $1 billion funding round to expand its operations in the United States
The company takes spent electric vehicle batteries, breaks them down, and uses the derived metals — including nickel, copper, cobalt and lithium — to make new components that can be used in electric vehicle batteries.
One of Redwood's primary goals is to produce battery components domestically to reduce some of the global trade and geopolitical risks surrounding the electric vehicle industry. Redwood also strives to use as much recycled material as possible to reduce the environmental impact of the automotive industry's transition from internal combustion engine vehicles to battery electric vehicles and hybrid vehicles.
While Redwood initially focused on recycling, the company also dabbles in refining and remanufacturing, adding so-called sustainably sourced materials to its products when needed, Straubel told CNBC earlier this year.
As CNBC previously reported, Redwood secured a $2 billion loan commitment from the US Department of Energy earlier this year. The company plans to use its funding to expand its operations in the United States, including inside and outside of its base in Carson City, Nevada, and has announced plans to build a battery materials campus outside of Charleston, South Carolina.
US Secretary of Energy Jennifer M. Granholm has identified domestic production of batteries and components as a way to meet growing demand for electric vehicles, create jobs and accelerate the transition from fossil fuels to renewable and clean energy.
Fossil fuels are now the world's most widely used form of energy and are responsible for a majority of human-caused emissions of CO2 and other toxic air and particulate pollutants that are driving climate change and its impacts, including more frequent and extreme weather events.
According to the Energy Information Administration, gasoline, excluding fuel ethanol, still accounted for 52% of the U.S. transportation sector's total energy use in 2022, despite the growing share of electric vehicles on the road.
According to a study by North America, battery production capacity is expected to increase to almost 1,000 gigawatt hours per year by 2030 Argonne National Laboratory.
Goldman Sachs Asset Management, Capricorn's Technology Impact Fund and other unnamed funds advised by T. Rowe Price Associates led the transaction in the new growth financing round, according to a company release. The Series D equity round brings Redwood's total capital to nearly $2 billion. OMERS, heavy equipment manufacturer Caterpillar Inc., Microsoft's Climate Innovation Fund and Deepwater Asset Management also invested in the round.
