Battery material firm gets conditional commitment for loan
Money will help fund Nevada’s recycling/remanufacturing plant
Part of the investment ‘frenzy’ spurred by the Inflation Reduction Act
(Update with DOE confirmation, Energy Secretary Granholm comment)
by Paul Leinert and David Shepperson
Feb 9 (Reuters) – The US Energy Department on Thursday made a conditional commitment to redwood materials for a $2 billion low-cost government loan to help build a $3.5 billion recycling and remanufacturing complex for battery materials in Nevada.
Energy Secretary Jennifer Granholm said that, if finalized, the loan would help the project create key material for electric vehicle batteries.
“It’s going to be a slam dunk for our domestic growing electric vehicle industry,” Granholm said, adding that Redwood will play an “outsized role” in bringing the battery supply chain home — because you’re focusing on those pieces. Which we don’t do in the United States.”
Redwood Materials expects to draw down the first loan tranche later this year, Chief Executive JB Straubel said in an interview.
Straubel said the initial loan draw will “help accelerate production and shorten the time for us to get to full scale” at the northern Nevada complex, which has begun producing copper foil for battery anodes.
Straubel said there has been a “frenzy of activity” among electric vehicle and battery makers since President Joe Biden signed the Inflation Reduction Act (IRA) in August. The IRA rules are designed to shift the US battery supply chain away from China, which currently produces 70% of batteries for electric vehicles.
Last July, the Energy Department said it would give a $2.5 billion loan to Ultim Cells, a joint venture between General Motors Co. and LG Energy Solutions, to help finance construction of new US battery cell manufacturing facilities.
Last month, the department said it planned to loan up to $700 million to Ioneer Ltd to finance the construction of its rhyolite ridge lithium mining project in Nevada.
The loans are coming from the Advanced Technology Vehicle Manufacturing (ATVM) loan program. More than 10 years ago, the ATVM program provided low-cost government loans to Tesla, Ford Motor and Nissan Motor, which included some cell manufacturing.
Redwood Materials, which was founded in 2017 by former Tesla executive Straubel, is on track to become one of the world’s largest recyclers and remanufacturers of battery materials, including copper, lithium, cobalt and nickel.
In addition to the Nevada site near Reno, Redwood Materials said in December that it planned to build a similar facility northwest of Charleston, South Carolina, also at a cost of about $3.5 billion.
Each facility will have an initial planned capacity to process 100 gigawatt-hours of electrode material, enough to supply more than 1 million EVs each. The South Carolina campus could eventually be expanded to “several hundred gigawatt-hours,” Straubel said.
Straubel said the South Carolina project is running about two years behind the Nevada facility.
Redwood Materials said it will supply copper foil to Panasonic from Nevada for battery cells produced at the Nevada Gigafactory, which Panasonic operates jointly with Tesla. It will also supply cathode material to Panasonic’s new Kansas battery plant, which is expected to open in 2025.
Redwood Materials has supply agreements with several manufacturers including Ford, Toyota Motor and Volkswagen Group. (Reporting by Paul Leinert in Detroit and David Shepperson in Washington; Editing by Sharon Singleton and Jonathan Oatis)