Battery recycling company founded by Tesla’s former chief technology officer has received a $2 billion loan from the Department of Energy

Redwood Materials, a Nevada company that recycles batteries for electric vehicles and was founded by a former Tesla chief technology officer, received a $2 billion green energy loan from the Biden administration.

It secured a conditional loan under the Department of Energy’s Advanced Technology Vehicle Program, which helped Tesla more than a decade ago.

Energy Secretary Jennifer Granholm announced the grant to a dozen workers at the Redwood plant in Nevada on Thursday along with Gov. Joe Lombardo.

“This region leads the way for the larger story of what’s happening in the country,” said Grenholm, pointing to a map of 80 manufacturing or supply chain companies that are expanding or opening in the US. Most of them were announced in response to According to her, President Joe Biden signed the infrastructure bill in 2021, and he signed the climate bill last year.

Battery recycling will help the U.S. build its own supply chain for electric vehicles, a key goal of the Biden administration as it seeks to phase out gas-powered cars in the broader fight against climate change. Mr. Biden has also promoted domestic production of critical minerals used in electric cars and other electronics as part of the fight against climate change and to counter China’s long-standing dominance of the supply chain.

The Energy Department said its conditional commitment demonstrates its intent to fund the Nevada project, but several steps remain before officials approve the final loan.

Redwood Materials was founded in 2017 by Jeffrey “JB” Strobel, the former chief technology officer of Tesla. It now has more than 300 employees recycling used batteries and supply contracts with Ford and Panasonic, which make batteries for Tesla.

Straubel said the company already has more material than it can recycle from used consumer batteries from lawnmowers, cell phones and toothbrushes, as well as waste from lithium-ion battery manufacturing.

The company claims it can recover more than 95% of the elements in a used battery, including lithium, nickel, cobalt, manganese and copper. The metals are then used to make anode and cathode components for new battery cells.

Redwood Materials is “going to play such a big role in bringing the battery supply chain back home — because you’re focused on parts that we don’t have in the United States,” Granholm told employees at an event Thursday. “You guys are making history on this one.

Redwood Materials is expected to create about 3,400 construction jobs and employ about 1,600 full-time workers, the department said. The campaign’s history in Nevada began with former Republican Gov. Brian Sandoval in attendance Thursday. That continued under Democratic Gov. Steve Sisolak before the loan was conditionally approved under Lombardo, who admitted he was late in the negotiations. The investment and resulting jobs help fulfill a campaign promise by Lombardo and former governors to diversify Nevada’s casino and tourism-based economy.

“That’s what we have to do to be successful in the state of Nevada,” Lombardo said. “We can’t keep all our eggs in one basket.”

In December, the Nevada Governor’s Office of Economic Development awarded Redwood $105 million in tax credits, the second-largest capital investment in the office’s history behind Tesla.

Last month, the Energy Department announced a $700 million conditional loan to an Australian company to mine lithium in northern Nevada, as the U.S. seeks domestic supplies of a key battery component for electric vehicles.

Redwood also announced plans to build a $3.5 billion battery manufacturing and recycling plant in South Carolina.

Once fully operational, the battery materials campus in McCarran, Nevada, outside of Reno, will be the first domestic facility to support the production of anode copper foil and cathode active materials for the lithium-ion battery manufacturing process. The process involves recycling used batteries and industrial scrap and recycling them into important materials, The Ministry of Energy said in a blog post.

Straubel, Redwood’s CEO, told The Associated Press last year that recycling battery materials would help the U.S. build its own electric vehicle supply chain. China now dominates the electric vehicle supply chain, including important minerals needed for electric vehicle batteries.

“Sequoia fills a critical gap in this whole piece, and our goal is to close the loop on all the materials that we’ve already extracted and made into products, to keep them in the regions where they were purchased and used,” Straubel told the AP: “Every battery we can recycle is materials for one battery that we don’t have to mine again.”