Redwood Materials, a battery recycler created by Tesla cofounder and former tech chief JB Straubel, is adding Toyota to a growing list of global automakers it’s working with to create a closed-loop supply chain for materials needed to power electric vehicles.
The partnership will initially focus on monitoring, recovering and recycling aging batteries from Toyota’s Prius, which came out more than two decades ago, and other hybrid-electric vehicles the Japanese auto giant sells, including Lexus models, at Redwood’s facilities in northern Nevada. The Carson City-based company will also look for other uses for old Toyota battery packs, including refurbishing them for use in new hybrids, cofounder and CEO Straubel said. Over time, as Toyota increases sales of pure electric models and starts making batteries at a plant it’s building in North Carolina, Redwood will also work to collect and recycle those packs.
Closely held Redwood has already begun collecting Toyota batteries but isn’t sharing financial details of its relationship with the automaker. Straubel also declined to say whether Toyota is investing in his startup. A key difference the Toyota relationship brings is the massive number of hybrid vehicles the company has sold in the U.S. over the past 20 years.
“We’re excited about this one,” Straubel tells Forbes. “It has a massive potential impact (for Redwood) when you look at the existing fleet of electrified Toyotas on the road. It’s really big. And they are steadfast. They’ve had a few twists and turns in their path to electrification but I’m convinced that they’re moving forward aggressively on this now and will continue to do so.”
Toyota’s decision to work with Redwood harks back to the automaker’s impactful $50 million investment in Tesla in 2010 and the sale of its idled Fremont, California, auto plant to the then struggling startup. Had that deal not happened when it did, it’s unlikely Tesla could have begun building its game-changing Model S sedan in 2012 that redefined the electric vehicle space. Straubel also worked directly with Toyota engineers on a battery-powered version of the RAV4 crossover using Tesla battery packs and motors the Japanese company briefly sold.
“There are a number of the same team members on the Toyota North American” side involved in the Redwood project with who Straubel worked over a decade ago, he said. “There’s no direct connection between the two projects, but it’s feeling like a surprisingly small world, especially related to EVs.”
Since 2000 Toyota has sold about 2 million Prius models in the U.S. and hundreds of thousands of other Toyota and Lexus hybrids.
(For more on JB Straubel and Redwood Materials, see “Tesla Tech Whiz Is Mining Riches From Your Old Batteries.”)
Straubel, who led the development of Tesla’s battery system and motors in its earliest days and oversaw the company’s Nevada Gigafactory, became fixated on solving the long-term challenge of finding enough materials to supply all the batteries needed as the auto industry shifts from petroleum to electricity. During his time at the EV company, he determined that recycling spent batteries was the best option to do that.
Redwood, which has raised over $800 million, has previously said it will be working with Ford and Volvo Cars, collecting and recycling their aging EV packs, and also works with battery giant Panasonic and lithium-ion cell maker Envision AESC.
Redwood estimates it’s processing more than 6 GWh of end-of-life batteries annually, though the amount continues to rise, according to Straubel. From those packs it recovers and resells enough materials and metals, including lithium, cobalt, copper and nickel, to make battery packs for up to 100,000 new EVs. The company intends to start making anode and cathode components at a U.S. plant for 100 GWh of batteries by 2025, or enough for over 1 million electric vehicles annually. By the end of the decade, it hopes to expand output to supply enough battery materials for 5 million EVs annually.