Redwood Materials says it won a $2 billion DOE loan for an EV materials plant

Redwood Materials says it won a $2 billion DOE loan for an EV materials plant

By Paul Lienert and David Shepardson

(Reuters) – Redwood Materials said on Thursday it had received a conditional commitment for a $2 billion loan from the U.S. Department of Energy to help build a $3.5-billion recycling and remanufacturing complex in Nevada for electric vehicle battery materials.

Redwood Materials expects to draw down the first loan tranche later this year, Chief Executive JB Strobel said in an interview.

The initial loan draw “will help accelerate (production) and compress the time for us” at the Northern Nevada complex, which has begun making copper foil for battery anodes, Straubel said.

Straubel said there has been “a frenzy” among electric car and battery makers since President Joe Biden passed the Inflationary Reduction Act (IRA) in August. The IRA rules are designed to divert 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 lend $2.5 billion to Ultium Cell, a joint venture between General Motors Co and LG Energy Solutions, to help finance the construction of new battery cell manufacturing facilities in Ohio, Tennessee and Michigan.

Last month, the department said it planned to loan Ioneer Ltd up to $700 million to build its Rhyolite Ridge lithium mine project in Nevada.

The loans are coming from the Advanced Technology Vehicles Manufacturing (ATVM) loan programme. More than 10 years ago, the ATVM program provided low-cost government loans to Tesla, Ford Motor and Nissan Motor, including some cell manufacturing.

Expansion Plan

Redwood Materials, founded in 2017 by former Tesla executive Straubel, is on track to become the world’s largest recycler and remanufacturer of battery materials, including copper, lithium, cobalt and nickel.

In addition to the Nevada site near Reno, Redwood Materials said in December it plans to build a similar facility northwest of Charleston, South Carolina, at a cost of about $3.5 billion.

Each facility will have an initial designed capacity to process 100 gigawatt-hours of electrode material, enough to supply more than 1 million EVs each. The South Carolina complex could eventually “expand 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 that Panasonic jointly operates with Tesla. It will supply cathode material to Panasonic’s new Kansas battery plant, which will open in 2025.

Redwood Materials has supply agreements with several manufacturers, including Ford, Toyota Motor and Volkswagen Group.

(Reporting by Paul Lienert in Detroit and David Shepardson in Washington; Editing by Sharon Singleton)

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