Ford, Tesla Cofounder’s Redwood Materials Form EV Battery Recycling Alliance

As Ford pushes to electrify its car and truck lineup to cut carbon pollution, the automaker also wants to lower costs and minimize the environmental impact of mining metals needed for battery packs for millions of future vehicles. To do that, it’s partnering with Tesla cofounder JB Straubel’s Redwood Materials to create a “closed loop” supply chain of recycled materials for lithium-ion cells.

Ford and Carson City, Nevada-based Redwood say they’ll work together to expand battery recycling to create a U.S. source of raw materials such as lithium, cobalt and nickel that are mined abroad. The Dearborn, Michigan-based carmaker is also investing $50 million in closely held Redwood, which has now raised about $820 million to expand its recycling activities. 

The goal is to “reduce the reliance on importing a lot of the materials that we use today when we build batteries. And it will reduce the mining of raw materials, which is going to be incredibly important in the future as we start to scale in this space,” Lisa Drake, Ford’s COO for North America, said in a press briefing. “Creating this domestic supply chain is really a major step toward making electric vehicles more affordable and more accessible to everyone.”

Ford, General Motors, Volkswagen and other global automakers all say they plan to use recycled materials in their electric vehicles, owing to both tight supplies of pricey commodity metals and the environmental impact of mining. The latter has come under scrutiny as demand for batteries grows.

The International Trade Center, a joint agency of the United Nations Conference on Trade and Development and the World Trade Organization, reviewed the “dirty aspects” of the clean vehicle revolution in a July 2020 report, detailing heavy use of water to extract lithium that comes from some of the world’s most arid regions; cobalt sourced from small, unregulated mines in Congo that employ thousands of children; and dust from nickel mines that can contain uranium and other harmful toxic materials.

“The partnership between Ford and Redwood Materials is indicative of a broader trend, in which automakers are taking a more active role in development and production of battery cells, and have announced partnerships and joint ventures with battery-makers, such as Tesla/Panasonic, GM/LG Chem and VW/Northvolt,” said Asad Hussain, mobility analyst for PitchBook. “They are also investing billions of dollars in battery plants and production facilities.”

The alliance with Ford is a significant validation of Straubel’s vision for Redwood to become a virtual mining powerhouse, recovering highly valuable and reusable materials from battery scraps and used lithium-ion cells. The partnership comes just a week after Redwood, which says it can already salvage tons of usable metals at costs below conventional mining at its Nevada facilities, said it will be expanding by building a $1 billion plant to fabricate cathode materials and anode needed for electric car batteries.

(For more on Straubel and Redwood Materials, see “Tesla Tech Whiz Is Mining Riches From Your Old Batteries.”)

He founded Redwood with a goal of “creating, inventing and building the circular supply chain for lithium-ion batteries, the first in North America, and helping provide those solutions, that technology, to partners to accelerate the whole industry,” Straubel told reporters. “It’s quite important that we find ways to solve these problems across the electrification movement broadly and set this up so it can continue to scale without roadblocks.”

“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.”

Straubel was Tesla’s chief technology officer until 2019 and has since become an evangelist for battery recycling to address limited supplies of materials, rising commodity prices and as the best way to mitigate environmental harm. In 2020, Redwood’s first full year of operation, it processed about 10,000 tons of scrap from battery makers Panasonic and Envision AESC and electronic waste containing batteries from Amazon. He expects the company to process double that in 2021, as it’s begun sourcing used batteries (and solar panels) from ERI, North America’s biggest e-waste recycler and electric bus builder Proterra.

Ford is spending more than $30 billion through 2025 to shift to an electrified vehicle line, including its investment in Redwood.

“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,” Ford President and CEO Jim Farley said in a statement. “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.”