In a ground-breaking venture that has the potential to reshape the battery industry, Redwood Materials, a startup co-founded by Tesla’s JB Straubel, has secured over $1 billion in a Series D funding round. This recent equity round was facilitated by significant players, including Goldman Sachs Asset Management, Capricorn’s Technology Impact Fund, T. Rowe Price Associates, and new investors such as OMERS, Caterpillar Venture Capital, Microsoft’s Climate Innovation Fund, and Deepwater Asset Management.
This influx of funding is earmarked to bolster Redwood’s capacity and expand the domestic battery supply chain, marking a significant step towards producing battery materials like lithium, nickel, and cobalt in the United States for the first time. Currently, most of these critical materials are sourced or produced in China, which refines a staggering 59% and 75% of the world’s lithium and cobalt, respectively. In stark contrast, the US and Canada only process a meager 3% of the world’s lithium and 3.5% of the world’s cobalt. This funding boost aims to reduce this gap significantly, signaling a crucial shift in global battery material production.
Redwood Materials Raises Over $1 Billion in Series D Funding
Redwood Materials, a leading battery recycling startup established by Tesla co-founder and board member JB Straubel, has secured a staggering $1 billion in its latest Series D equity funding round.
A Major Investment
The funding round, which significantly boosts the startup’s financial backing, was co-headed by Goldman Sachs Asset Management and Capricorn’s Technology Impact Fund, along with funds and accounts managed by T. Rowe Price Associates. The round saw participation from new investors such as OMERS, Caterpillar Venture Capital, Microsoft’s Climate Innovation Fund, and Deepwater Asset Management.
This new funding adds to the startup’s already impressive finances, which include nearly $1 billion of previously raised equity capital and a $2 billion loan commitment from the Department of Energy.
Aiming for Domestic Battery Supply Chain Expansion
Redwood Materials intends to utilize these funds to bolster its capacity, enlarge the domestic battery supply chain, and provide its clients with the chance to purchase battery materials, such as lithium, nickel, and cobalt, produced in the US for the very first time.
Currently, the majority of battery materials are sourced or manufactured in China, which refines 59% and 75% of the world’s lithium and cobalt, respectively. In comparison, the US and Canada together only process and refine a mere 3% of the world’s lithium and 3.5% of the world’s cobalt.
Building Toward a Sustainable Future
To help bridge this gap, Redwood Materials is constructing two factories in the US: a 175-acre recycling facility in Carson City, Nevada, and a 600-acre facility in Charleston, South Carolina. These facilities will allow Redwood to extend its operations beyond battery recycling and refining materials to remanufacturing both the cathode and anode copper foil.
The new capital is expected to enable Redwood to establish its copper foil production by the end of 2023, with Panasonic slated as its first foil customer, building on an existing partnership.
A Vision for the Future
The company plans to assemble an industry-leading team to ensure top-tier execution in sustainable battery materials production. By 2025, Redwood Materials aims to reach an annual capacity of 100 gigawatt-hours of cathode active materials and anode foil, sufficient to power 1 million EVs. By 2030, the company hopes to increase production output to 500 GWh per year, potentially powering 5 million EVs.
In conclusion, Redwood Materials’ recent funding success and ambitious plans for expansion indicate a promising future for the domestic battery supply chain in the US. This move could potentially reduce dependency on foreign sources for battery materials while boosting the sustainability of the battery lifecycle, aligning with the broader global shift toward renewable energy and electric vehicles.
