Get All Access for $5/mo

Tesla's Co-Founder Thinks He Has a $3.5 Billion Solution to Our Battery Shortage Known as Elon Musk's former right-hand man, JB Straubel is opening up an EV battery recycling plant in the heart of the 'Battery Belt.'

By Jonathan Small

Opinions expressed by Entrepreneur contributors are their own.

Redwood Materials announced today that it will break ground on a new EV battery recycling plant in the heart of the "Battery Belt," just outside Charleston, South Carolina.

The $3.5 billion campus, the company's second, will take old batteries, break them down to their basic metals (such as nickel, copper, cobalt, and lithium) and then rebuild them into cathode and anode products, the most critical and expensive components in an EV. The plant will sit on 600 acres and create more than 1,500 jobs, according to a statement from the company.

Redwood's founder, JB Straubel, was a co-founder and CTO at Tesla, where he was known as Elon Musk's right-hand man. Considered an engineering genius, Straubel developed Tesla's charging network and its first battery plant.

Now he's turning his attention to recycling batteries for EVs, which he says is critical to powering the energy transition from fossil fuels to electricity without causing destructive climate change.

Related: Electric Cars Keep Bursting Into Flames In Florida

Why recycling? Why in the U.S.?

We need massive quantities of batteries to power a global energy transition, but to produce them at scale we need to mine more metals like lithium than the earth can supply. In addition, most anode and cathode components are not produced in the U.S., so battery cell manufacturers have to source them through 50,000+ mile global supply chain estimated to cost more than $150 billion by 2030.

In response to this demand, a new battery manufacturing corridor from Michigan to Georgia has sprung up over the last few years called the "Battery Belt." Companies such as BlueOval SK, which is owned by Ford and SK On of South Korea, and Ultium Cells, which is owned by General Motors and LG Energy Solutions of South Korea, recently opened plants.

Adding to the financial incentive, The Inflation Reduction Act of 2022 requires batteries to have at least 40 percent of materials sourced from North America or a US trading partner to be eligible for a billions of dollars in federal loans and tax credits.

"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 U.S. battery and electrification demand," said Redwood Materials in a press release.

have been extracted in all of human history. U.S. companies have started planning huge new battery factories, but Straubel thinks we won't have enough materials to supply them, not to mention that nearly all the world's facilities to process those materials are in Asia, meaning they will have travel 10,000 miles before we can use them. To that end, Redwood Materials is building a gargantuan facility outside Reno, which will process new minerals, recycled batteries, and manufacturing scrap into enough copper foil and powdery, mineral-rich cathode active material to build batteries for about 1 million electric cars a year by 2025. To completely transition the U.S. to electric vehicles, we'll need about 10 facilities of that size, with mining operations on an unheard-of scale to supply them. But once more old batteries start being retired, Straubel says, his facilities will switch to pure recycling, creating a closed, clean system in which we reuse minerals in one battery generation after another, forever.

Jonathan Small

Entrepreneur Leadership Network® VIP

Founder, Write About Now Media

Jonathan Small is an award-winning author, journalist, producer, and podcast host. For 25 years, he has worked as a sought-after storyteller for top media companies such as The New York Times, Hearst, Entrepreneur, and Condé Nast. He has held executive roles at Glamour, Fitness, and Entrepreneur and regularly contributes to The New York Times, TV Guide, Cosmo, Details, Maxim, and Good Housekeeping. He is the former “Jake” advice columnist for Glamour magazine and the “Guy Guru” at Cosmo.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Side Hustle

This 26-Year-Old's Side Hustle That 'Anybody Can Do' Grew to Earn $170,000 a Month. Here's What Happened When I Tested It.

Stephen Alvarez was working at a dental supply company and following his passion for cars on the side — then an Instagram ad changed everything.

Marketing

How AI Is Revolutionizing the Marketing Landscape (and How to Use It Ethically)

The marketing landscape is undergoing a significant transformation due to rapid advancements in AI. Amidst this innovation, the crucial role of identity verification is highlighted as essential for ensuring ethical and effective AI use in marketing.

Business News

Elon Musk Reignites Feud With Mark Zuckerberg Over July 4th Vacation Video: 'I Prefer to Work'

Zuckerberg went wake-surfing over the holiday weekend, while Musk claims he was working.

Business News

Over 10 Billion Passwords Have Been Exposed in the Largest Password Hack in History

The data is thought to have been collected over the past two decades.

Growing a Business

Discounts and Deals Used to Be Enough to Make Loyal Customers — But Not Anymore. This Is What You Need Now.

Building brand loyalty today requires more than just low prices, discounts, deals and referrals for deeper, lasting relationships with customers.

Franchise

Take Advantage of the Booming Value Gym Market with a Pure Fitness Franchise!

Pure Fitness gym franchises are rapidly expanding in the low cost and flexible gym membership business that offers a resilient and flexible business model which helps achieve success in any market.