Redwood Materials scores a new $2 billion loan to build out battery recycling facility in Nevada
JB Straubel sits down with CNBC’s Phil LeBeau at Redwood Materials.
Redwood Materials has attained a $2 billion loan commitment from the Department of Energy, the agency announced on Thursday via its loan programs office.
The battery-recycling startup will use the funding to build and expand its battery recycling facility outside of Reno, Nevada. The facility takes end-of-life electric vehicle batteries and automotive production scrap, processes these, and churns out raw materials and products that are used to make new EV battery cells, namely anode copper foil and cathode-active materials.
Redwood Materials was founded by former Tesla CTO and cofounder JB Straubel in 2017 during his tenure at Elon Musk’s car company.
Straubel left Tesla to run Redwood Materials full-time in 2019, and several former Tesla employees have joined him there including COO Kevin Kassekert, who previously worked as a vice president of people and places at Tesla.
As CNBC previously reported, last year Redwood Materials struck a multi-billion dollar deal with Tesla supplier Panasonic.
“These are very capital-intensive projects, and we’re in a competition with Asia to ramp this up and to bring these supply chains and manufacturing operations back to the US,” said Straubel on CNBC’s The Exchange on Thursday.
He added, “The US battery demand and EV demand is growing…but we have a long way before that supply chain is predominantly moved to the US.”
The Director of the DOE’s Loan Programs Office, Jigar Shah, wrote in a post about the new loan commitment:
“In order to meet the needs of the rapidly growing EV market, the United States will need to expand battery recycling capabilities, as well as grow our domestic capacity for producing battery precursor materials. By lowering the cost of the critical materials for lithium-ion batteries using recycled materials, electric vehicles can become more accessible to lower income communities.”
With the aim of lowering greenhouse gas emissions over the next decade, President Joe Biden pushed for and signed the $430 billion U.S. Inflation Reduction Act (IRA) in August 2022. The DOE’s new loan to Redwood Materials comes in part from that law, which has so far resulted in more than 100,000 new green jobs being announced.
The DOE says it appropriated $55 billion in new estimated loan authority for its Advanced Technology Vehicles Manufacturing program through the IRA. This same program once helped Tesla get its start — and Tesla repaid their loan early and grew into a juggernaut, in sharp contrast with cleantech companies that fizzled like Solyndra, for example.
Redwood Materials has a pilot line up and running for production of anode copper foil in Nevada already. It is aiming to support the production of more than 1 million EVs per year, the DOE said in its post, which could help drivers avoid an estimated 3.5 million tons of CO2 and other tailpipe emissions, annually.
While Tesla may have been the birthplace of Redwood Materials, and a partner of the company today, it could compete with the recyclers on technology eventually. In its 2022 annual financial filing with the SEC, Tesla said, “We have agreements with third party battery recycling companies to recycle our battery packs and we are also piloting our own recycling technology.”
Tesla CEO Elon Musk wears a ‘Trump Was Right About Everything!’ hat, as he, U.S. Trade Representative Jamieson Greer and Central Intelligence Agency Director John Ratcliffe attend a cabinet meeting at the White House, in Washington, D.C., U.S., March 24, 2025.
Carlos Barria | Reuters
Tesla is set to report first-quarter earnings on Tuesday after market close.
Here’s what Wall Street is expecting, based on a survey of analysts by LSEG:
- Earnings per share: 39 cents
- Revenue: $21.11 billion
Tesla is expected to report a slight revenue decline from $21.3 billion in the same quarter a year earlier. However, investors are going to be more focused on what the future holds after concerns about tariffs and CEO Elon Musk’s close ties to the White House pushed the stock price down 44% so far this year as of Monday’s close.
Earlier this month, Tesla reported a 13% decline in deliveries to 336,681. Tesla blamed the lower deliveries, in part, on the need to suspend production temporarily at its factories while it upgraded lines to start manufacturing a refreshed version of its popular Model Y electric SUVs.
Deliveries are the closest approximation of vehicle sales reported by Tesla but are not precisely defined in the company’s shareholder communications.
At an all-hands meeting with employees last month, Musk tried to reassure staffers that they were still in good hands, and to “hang onto your stock.” He pointed to the popularity of the Model Y, and Tesla’s potential in robotics, artificial intelligence and autonomous vehicle technology.
At the meeting, Musk also made light of the backlash against Tesla elicited by his work for President Donald Trump to reduce the size of the federal government, and his endorsements of Germany’s anti-immigrant AfD party, along with other political rhetoric and antics.
“If you read the news it feels like, you know, Armageddon,” Musk said on a livestream of the employees meeting. “It’s like, I can’t walk past the TV without seeing a Tesla on fire.” He followed up saying, “This is psycho, stop being psycho!”
That was before Trump’s announcement earlier this month of widespread tariffs, the one area where Musk has publicly broken with the Trump administration. On X, he called Peter Navarro, Trump’s top trade advisor and tariff proponent, a “moron” and “dumber than a sack of bricks.”
Tesla stands to take a significant hit from the president’s proposed tariffs, assuming they don’t get rolled back. Tesla manufactures cars in the U.S. for domestic sales so it’s not subject to the 25% tariff on imported autos, but the hefty levies on other components and materials could be severe.
Tesla relies on suppliers in Mexico and China for items like automotive glass, printed circuit boards and battery cells, among other parts essential for the production of its cars. The company has sought an exemption from the U.S. trade representative for equipment imported from China that it uses in its factories.
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