Tesla co-founder JB Straubel’s company Redwood Materials inks battery recycling deal with Ford.

Ford to invest $50 million in Carson City, Nevada-based Redwood Materials as part of a “strategic relationship” over closed-loop battery recycling.

A closed loop allows the bulk of materials from older batteries to be reused, shrinking the environmental footprint for battery production while also lowering costs.
As part of the deal, Ford will be investing $50 million to help Redwood expand its manufacturing footprint. Straubel also co-founded and served as the chief technical officer of Tesla before founding Redwood.

“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,” Straubel wrote in a company post.

Domestic manufacturing is especially critical in addressing the logistics and cost issues associated with battery production.
The partnership with Redwood will allow Ford to ramp up production in what is expected to be a highly competitive electric vehicle market.

After Tesla popularized and demonstrated the viability of electric vehicles, major companies such as Ford, Volkswagen, Mercedes and BMW have all increased investment in EVs.

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

Construction is underway on Redwood Materials' new facility at the Tahoe-Reno Industrial Center.
Redwood, which was founded in 2017, is in the midst of a significant expansion.

The company is increasing the footprint of its Carson City facility from 150,000 square feet to 550,000 square feet. It also broke ground this year on 100 acres of land at the Tahoe-Reno Industrial Center for another facility. The new project is in the same industrial park as the Gigafactory 1, which Straubel helped set up during his time with Tesla.

Tesla partner Panasonic is also one of Redwood’s big customers. The Japanese company inked a deal with Redwood in 2019.
Just as important as supplying batteries for future cars is dealing with older batteries, Straubel added. Redwood is already recycling batteries from the first generation of EVs that hit the market and expects a flood of older batteries from California to hit the supply chain in the coming years.

Recycling will play a key role in Ford’s EV strategy, said Lisa Drake, North America chief operating officer for Ford. “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,” Drake said.

“This approach will help ensure valuable materials in end-of-life products re-enter the supply chain and do not wind up in landfills, reducing our reliance on the existing commodities supply chain that will be quickly overwhelmed by industry demand.”