A plant is being built in Nevada to make materials for electric vehicles.

Redwood Materials

In a deal worth billions of dollars, a battery recycling and components company started by a billionaire will make batteries for a Panasonic plant. As the Biden Administration pushes for a domestic supply base for batteries and electric vehicles, it may be the first large-scale effort to produce that component in the U.S.

Closely held Redwood, which is building a $3.5 billion plant near its Carson City, Nevada headquarters to make anode materials and cathodes for EV batteries, says it plans to start shipping cathodes made with some recycled material to a Panasonic plant in Kansas in 25 years. The value of the contract with Panasonic is in the billions of dollars, according to Forbes. It is important that it is a step in the right direction to cut U.S. reliance on Chinese materials.

Roughly 15% of the cost of an EV is the cathode material. The component isn't very well understood. The cost of an EV depends on the battery supply chain. This is an important step towards launching this industry in the U.S.

The IRA, signed into law in August, provides new federal incentives for the purchase of electric cars and trucks of up to $7,500, but it also states that both vehicles and their batteries must be produced or processed in North America. China is the main supplier of the anodes and cathodes used in batteries that are made in the US.

In 2029, all of the battery components need to be produced in North America, according to a recent report. Only 3% of vehicles are expected to use locally produced anode active material.

Panasonic will use copper foil in Kansas as well. The goal of producing enough of both components for 1 million EV battery packs is set to be achieved by the year 2025. The goal by the end of the decade is 500 gigawatt-hours per year, enough for 5 million electric vehicles.

The recycled metals and minerals are from the batteries.

Redwood Materials

When the company came out of the shadows, it focused on collecting massive amounts of used batteries and electronics to extract and reuse high value metals. It wants to use recycled materials to make new battery components, as well as buying some minerals from suppliers.

The largest U.S. battery plant was developed by Straubel, who oversaw the creation of the first battery packs and motor. He left the company in the summer of 2019. The company has raised more than $1 billion from investors and generated an undisclosed amount of revenue from sales of recycled commodity metals.

There is no plan to make Redwood public at the moment. He wouldn't say how much he owned in the firm.