Tesla Cofounder Aims To Rev Up U.S. EV Battery Market With $3.5 Billion South Carolina Plant

With plans for a massive plant in South Carolina, Redwood Materials is speeding up its push to build a U.S. supply base for electric vehicle batteries.

The company, which is building a $1.1 billion plant in Nevada, is buying 600 acres in Camp Hall, an industrial park near Charleston, for an East Coast complex that will eventually employ 1,500. The facility will recycle and recover high- value metals from used batteries and turn them into materials needed by new battery plants that are popping up across the Southeast and Midwest. It is the largest such announcement for this type of facility in the U.S., with construction slated to start in early 2023 and recycling operations to start by the end of the year. It will be enough to make 1 million electric vehicles a year when it's up and running.

He said having a footprint that's more geographically spread across the U.S. is helpful because there's a wave of battery manufacturing heading towards the U.S. The battery belt between Michigan and Georgia is being created due to the expansion. That is part of the reason why we want to build a footprint in the middle of the region.

Tens of billions of dollars have been committed by auto and battery makers for new plants to make battery packs for dozens of EV models. Most of the factories will have to source components from suppliers in China, South Korea and Japan. The recently enacted IRA is pushing the automotive industry to use batteries that include higher amounts of content from North American suppliers, which is a big opportunity for Redwood and its competitors.

“There’s a giant wave of battery manufacturing heading toward the U.S.”

The Inflation Reduction Act sets a pretty clear imperative for almost everyone building batteries and EVs in the United States to find a domestic supply chain.

Ford, Fidelity, Bill Gates, and Amazon are some of the investors who have invested in the company. It will be looking for additional funds to cover the $4.6 billion it is committing for both the South Carolina campus and its production facilities in Nevada. A source close to the deal said that if the company fulfilled its long-term investment plans for the Camp Hall site, it could be eligible for hundreds of millions of dollars in incentives from South Carolina and local governments.

The company has not yet applied for a low-cost loan from the Department of Energy. The DoE said this week that GM and battery partnerLG Energy Solutions qualified for a $2.5 billion loan that will help pay for three cell manufacturing facilities they are building.

In 2010,Tesla received an ATVM loan that it used to purchase and equip its first plant, a former Toyota- GM factory In 2004, Straubel joined the EV company and served as its chief technology officer until he left in 2019.

Straubel wouldn't say which battery and auto companies would buy the materials it would make in South Carolina. In addition to being close to many new battery plants, the Charleston region has access to the city's port, rail and trucking networks.

In order to make batteries, mined metals need to be tight, which inspired Straubel to cofound Redwood. The goal is to create a closed-loop production operation that uses both recovered and commodity metals. The South Carolina plant is going to be powered by renewable energy. It expects to cut the carbon emissions of making battery components by up to 80%.

Between its Nevada and South Carolina projects, no company has yet announced larger plans to make anodes and cathodes in the US.

"From what I can see, we are the leader and are further ahead, but I'm confident that we're going to see more and more announcements" The supply chain needs to be in balance. Someone needs to do the supply chain locally for every 100 gigawatt hours of cell manufacturing that happens. We're out of balance right now.