© Reuters. FILE PHOTO: A Toyota Logo is seen at a Toyota dealership in Zaventem, Belgium, November 25, 2022. REUTERS/Johanna Geron/File Photo
By Paul Lienert
(Reuters) – Redwood (NYSE:) Materials has signed a long-term contract to supply Toyota Motor (NYSE:) with recycled materials for the Japanese automaker’s $13.9 billion North Carolina electric vehicle battery plant, Redwood said Thursday.
The Nevada-based materials specialist said it would remanufacture EV battery components from materials supplied by Toyota and recycled from end-of-life vehicles, mainly hybrid-electric models such as the Prius.
Redwood, one of the world’s leading battery recyclers, did not disclose details on value or timing of the agreement.
In an interview, Redwood Chief Executive J.B. Straubel, a co-founder and a director of global EV leader Tesla (NASDAQ:), said the new contract will enable Redwood’s business “to grow and expand with Toyota’s future needs.”
“We want to be a solution for them for years to come,” Straubel said. “I expect they’ll be continuing to grow that plant and maybe others.”
Straubel has said Redwood is building a closed-loop, or circular, battery ecosystem aimed at lowering EV costs by lessening dependence on imported materials while reducing the environmental impact.
Redwood aims to build annual battery component production capacity in the U.S. of 100 gigawatt-hours — enough to supply more than 1 million EVs a year, with the long-range option to expand annual capacity to 500 GWh.
Straubel, formerly Tesla’s chief technology officer, founded Redwood in 2017. The company has raised $2 billion at a valuation of $5.25 billion, according to investor website PitchBook, and has negotiated a Department of Energy-backed $2 billion loan.
Straubel said the company will supply battery components to Toyota from its Sparks, Nevada facility and eventually from a $3.5 billion facility it is building outside Charleston, South Carolina.
Redwood will sell remanufactured cathode active material, made from recycled lithium, nickel and cobalt, as well as anode foil made from recycled . Those two components represent a majority of the cost of current lithium-ion cells.
Several companies have announced plans to make battery components in North America, to take advantage of incentives built into the U.S. Inflation Reduction Act and similar legislation aimed at reducing imports of batteries and materials from China.
Redwood previously announced recycling deals with Panasonic (OTC:), Volkswagen (ETR:) and Ford (NYSE:), among others. Redwood also is selling remanufactured battery components to Panasonic, which jointly operates an EV battery plant with Tesla in Nevada.