South Carolina is rapidly becoming a focal point of the EV revolution in America. Hyundai has begun construction of a $5 billion factory to build electric cars in South Carolina. BMW and Volvo have factories in the state. They don’t manufacture electric cars yet, but likely will do so soon in order for those cars to be eligible for US tax incentives. This week, Redwood Materials announced it will start construction on a $3.2 billion battery recycling facility on 600 acres near Charleston, South Carolina early next year.
Redwood Materials takes in batteries that are at the end of their useful life, breaks them down to their basic metals such as nickel, copper, cobalt, and lithium, and then uses those metals to manufacture new cathode and anode products, which are the most critical and expensive components in an EV battery. Localizing the production of critical battery components and ensuring these materials are recycled is the only way to drive down costs, emissions, and geopolitical risks while meeting US battery and electrification demand.
Currently, anode and cathode components are not produced in North America. Battery cell manufacturers have to source them via a 50,000+ mile long global supply chain. As a result, US battery manufacturers will spend more than $150B purchasing those components from other countries by 2030.
A new manufacturing corridor from Michigan to Georgia is becoming known as America’s “Battery Belt” and is where hundreds of GWh a year of battery cell production capacity will be built and start operating between now and 2030. Yet, unless metals like lithium and nickel are produced and refined and remain in country for domestic anode and cathode manufacturing at scale, these American battery cell facilities will have to continually source the majority of their components, predominantly from Asia. This will send most (50-75%) of the economic value and job creation overseas, the company says.
Its next Battery Materials Campus will be in the heart of the “Battery Belt” in Camp Hall just outside of Charleston. Redwood will recycle, refine, and manufacture anode and cathode components on more than 600 acres, creating more than 1,500 jobs, and investing $3.5 billion in the local community. Eventually, this campus will produce 100 GWh of cathode and anode components per year — enough to power more than one million EVs. However, the site also can be expanded to potentially produce several hundred GWh annually to meet future demand.
“We plan to break ground on our Carolina Campus in Q1 2023 and have our first recycling process running by the end of next year. We will build out downstream component manufacturing and scale step by step.”
Redwood Materials Goes 100% Electric
The South Carolina facility will be 100% electric and won’t use any fossil fuel in the recycling processes — not even natural gas. Redwood Materials will source only zero emission, clean energy and its innovative plant design and manufacturing process will allow it to reduce the carbon dioxide emissions associated with producing these battery components by about 80% compared to the current Asia-based supply chain that America is dependent on for these crucial materials.
South Carolina has been home to the automotive industry for nearly three decades, with more than 500 automotive companies and 72,000 autoworkers. It is committed to creating a secure energy future and a competitive landscape for electric vehicle manufacturing supported by a world class workforce, fast and efficient logistics, and zero carbon electricity. All those factors plus the availability of a phenomenal site made it a smart decision for Redwood Materials to invest in South Carolina. Redwood’s existing partners like Toyota, Volvo, Panasonic, and Envision AESC also have a strong presence in this region, in addition to many other battery manufacturers. The South Carolina factory will allow the company to meet the requirements of its partners while scaling up manufacturing in the most sustainable and cost effective way.
Charleston has consistently been recognized as one of the top cities in the world to live, work, and visit. Redwood is offering an exciting new industry and will be able to recruit a talented workforce from all over the world to this region.
“With increasing demand for lithium ion batteries, the ability to import raw materials, which we will also be able to refine on this site, presents a significant advantage. The Port of Charleston offers a top U.S. port and the site chosen will be served by rail access, adding to the fast and efficient logistics this state and site offers,” the company says. When paired with the benefits of the recent Inflation Reduction Act, this strategic location also allows us the opportunity to invest more heavily at home while potentially exporting components in the future, allowing the U.S. to become a global leader in this manufacturing capability.”
Recycled Materials Outperform
Redwood Materials has a tiger by the tail. It is planning a major expansion of its facility in Nevada where it recycles batteries for Panasonic. Some of the reclaimed materials produced there are finding their way into new batteries for Tesla. The company has also indicated recently that a recycling facility in Europe may be on its radar.
Should people be concerned about recycled battery materials? After all, most folks are a bit squeamish about drinking the reclaimed water available now from many wastewater treatment plants. “In general, people’s impression is that recycled material is not as good as virgin material,” says Yan Wang, a professor of mechanical engineering at Worcester Polytechnic Institute. “Battery companies still hesitate to use recycled material in their batteries.”
But there is no reason to be concerned. He and a team of researchers have delved into this topic and determined in most cases, the reclaimed materials are as good or even better than new materials, as hard as that may be to believe.
JB Straubel, the founder of Redwood Materials, certainly has that vision thing going on. Everyone is hung up on finding battery materials that meet the requirements of the Inflation Reduction Act and he is talking about exporting to other countries. This at a time when no one else is thinking about the US being a major supplier of battery materials and components. That’s impressive.
Redwood has already struck deals with Volkswagen, Audi, Toyota, Ford, and Volvo to recycle worn out batteries from their cars. There are other battery recycling companies out there, like Li-Cycle, but Redwood Materials is the clear leader in the field and rapidly pulling away from the competition.
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