Redwood Materials Secures $1 Billion In Series D To Revolutionize US Battery Supply Chain

In a landmark funding round, Redwood Materials, the innovative battery recycling firm founded by Tesla Inc. Co-Founder and former Chief Technology Officer JB Straubel, has amassed $1 billion in its Series D round. 

The round catapults the company's post-money valuation to over $5 billion and raises its total equity capital to $2 billion.

The company announced that the capital will be strategically used for enhancing capacity, developing a robust domestic battery supply chain and enabling the sale of battery materials produced in the United States for the first time. With China dominating the market — processing 59% and 75% of the world’s lithium and cobalt, respectively — this move marks a significant step toward the domestication of battery materials, an initiative strongly encouraged by the Biden administration's Inflation Reduction Act.

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Redwood Materials is not stopping at recycling. It is taking decisive steps to establish a closed-loop supply chain in the United States by constructing multiple factories. Among the projects underway is a 175-acre recycling facility in Sparks, Nevada, which will primarily focus on producing anode copper foil. Another 600-acre facility planned in Charleston, South Carolina, aims to extend Redwood's capabilities into the remanufacturing of both cathode and anode copper foil.

By 2025, the firm intends to achieve around 100 gigawatt hours (GWh) of annual capacity for cathode active materials and anode foil. The capacity is projected to power approximately 1 million electric vehicles. The long-term vision extends to scaling the production output to 500 GWh per year by 2030, sufficient to power 5 million electric vehicles.

Redwood Materials secured Panasonic Holdings Corp. as its first copper foil customer, a natural extension of their existing partnership. Panasonic, a key battery supplier for Tesla's Nevada gigafactory, started collaborating with Redwood in 2019 by recycling manufacturing scrap.

In addition to the new funding round, the U.S. Department of Energy recently approved a $2 billion conditional loan for Redwood as part of its Advanced Technology Vehicle Manufacturing Loan Program. The federal support underscores the strategic significance of domesticating the battery supply chain.

The Series D round was co-led by venture capital firms like Goldman Sachs Asset Management, Capricorn Investment Group's Technology Impact Fund and funds managed by T. Rowe Price Associates Inc. New investors such as OMERS, Microsoft Climate Innovation Fund and Deepwater.

Redwood Materials' efforts parallel a broader movement in the battery recycling sector, with other U.S.-based companies like American Battery Technology Co., Li-Cycle and Ascend Elements securing considerable private funding in recent times. As the demand for electric vehicles and energy storage systems continues to surge, federal investment in battery recycling and research is expected to follow suit.

This massive influx of capital into Redwood Materials is not just a testament to its growth potential, but also a pivotal moment for the U.S. battery supply chain. As the United States moves toward energy independence and sustainable technologies, Redwood's ambitious plans could be a significant milestone in reshaping the industry landscape.

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