Former Tesla exec inks new recycling deal as battery costs soar 

Walk with JB Straubel by means of the Redwood Materials recycling plant in Carson City, Nevada, and one factor stands out: Pallets stacked on high of pallets full of previous batteries, faulty battery cells and scrap materials from the close by Panasonic plant.

“The sheer magnitude of the waste and scrap problem and the magnitude of batteries that need to get recycled is, I think, shocking to most people,” mentioned Straubel, founder and CEO of Redwood Materials. Straubel spent greater than a decade at Tesla, earlier than resigning as chief technical officer in 2019 so he might concentrate on rising his recycling firm.

Redwood Materials has reached an settlement to recycle scrap and faulty battery cells for Envision AESC, which manufactures batteries for the Nissan Leaf in Smyrna, Tennessee. It is the most recent transfer for the corporate Straubel began in 2017 to provide battery makers and auto firms with uncooked supplies briefly provide as EV manufacturing surges all over the world. 

“We bring the materials back to a very clean and sort of fundamental state so there is no loss in effectiveness,” mentioned Straubel. “It’s actually indistinguishable whether there is cobalt coming via an old battery or from a mine.” 

Cobalt, lithium, nickel, and different minerals and metals utilized in EV batteries have grow to be extremely popular commodities, so scorching, costs have rocketed to 52-week highs. Fueling the rise in costs is an introduced surge in lithium-ion battery manufacturing as automakers from Tesla to General Motors and Ford dramatically enhance EV plans over the following decade.   

“To make the batteries the world needs in 10 years, the industry will need 1.5 million tons of lithium, 1.5 million tons of graphite, 1 million tons of battery-grade nickel and 500,000 tons of battery-grade manganese. The world produces less than a third of each of those materials today. New battery materials sources are highly valued and desperately needed,” mentioned Sam Jaffe, managing director at Cairn ERA, an power consulting agency.  

To drive house his level, Jaffe factors out U.S. lithium-ion battery demand topped 43 megawatt hours final yr and can climb to 482 megawatt hours by 2030.

The progress is implausible information for Panasonic, which manufactures battery cells on the Gigafactory it operates with Tesla in Sparks, Nevada. Thanks to its newest enlargement, the Gigafactory will produce slightly below 2 billion battery cells this yr.

Allan Swan, who oversees Panasonic’s a part of the manufacturing facility, says much more manufacturing is required. “Here in the United States, we certainly need four, five, six of these factories to support the automotive industry,” he mentioned.  

Celina Mikolajczak, vp of engineering and battery expertise at Panasonic Energy North America, believes the booming EV plans means the trade has to have a look at recycling batteries as a new supply for key minerals.

“There’s a lot of energy spent extracting these minerals and it makes absolutely no sense to landfill them,” she mentioned. “We would be really foolish if we didn’t take advantage of the capacity of older cells, to create the next generation.”

Straubel and his staff at Redwood wish to say the biggest lithium mine is within the junk drawers of America. It is a reminder Redwood is positioning itself to recycle a variety of lithium-ion batteries, not simply people who go into electrical automobiles. Still, given Straubel’s lengthy tenure at Tesla and his huge information of the EV market, he’s intently watching the quickly increasing EV market.

As Straubel ripped open the packaging holding an previous laptop computer battery that had been shipped to Redwood Materials, he sized up the pallet of previous batteries stacked as excessive as his waist.  He estimates there could also be a billion batteries in previous laptops, cellphones and long-forgotten cordless instruments sitting round U.S. houses.

“I’m a little surprised that some of the big OEMs (automakers) have taken perhaps a little longer to get fully pivoted and oriented in this direction,” mentioned Straubel. “I’m also a little surprised at how many other successful and growing start-ups there are.”

Many of these start-ups have grow to be publicly traded firms by means of SPAC mergers. Straubel thinks a few of the start-ups are intriguing, however a number of might have weak or questionable enterprise plans. Which ones? Straubel will not say, however he does have these phrases of warning for traders.

“Think calmly about the real business plan and the long-term potential,” he mentioned. 

— CNBC’s Meghan Reeder contributed to this text.

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