Department of Energy to lend $2 billion to Redwood Materials

The Energy Department on Thursday announced a $2 billion loan to help a Nevada company ramp up production of critical electric vehicle battery components.

The company, Redwood Materials, plans to use the loan to expand a manufacturing campus near Reno, Nevada, where it manufactures some of the components from new and recycled sources. The company was founded by JB Straubel, a former top Tesla executive, and has partnerships with Panasonic, Ford Motor, Toyota, Volkswagen and Volvo.

Once construction is complete, Redwood aims to produce enough battery materials at the Nevada campus to support the production of more than one million electric vehicles per year. The loan will help create about 3,400 construction jobs, Redwood and the Energy Department said. The company said it expects around 1,600 full-time employees to work on campus when complete.

The announcement was the department’s latest loan to support domestic battery manufacturing as the Biden administration seeks to bring more of the electric vehicle supply chain to the United States and reduce dependence on electricity. regard to China. Last month, the department announced it would lend $700 million to support a mining project in Nevada. In December, the department announced a $2.5 billion loan for Ultium Cells, a battery manufacturing joint venture between General Motors and LG Energy Solution.

Under the Obama administration, the Energy Department provided a $465 million loan to Tesla that helped it produce the Model S sedan when the automaker was much smaller and faced an uncertain future . But the department made few loans under the Trump administration. After taking office, President Biden placed a renewed emphasis on green energy and zero-emission vehicles in an effort to combat climate change.

In a statement on the Redwood loan, the Department of Energy said “the project marks an important step toward achieving the Biden administration’s goal of manufacturing half of all new vehicles sold by 2030 zero-emission vehicles, including battery electric vehicles, plug-in hybrids or fuel cell electric vehicles.

Anodes and cathodes, two important components of every battery, are mostly produced in Asia, but Redwood and a handful of other American companies are trying to change that. Last month, the company began producing anode copper foils at its Nevada campus, and it is also working on producing cathode materials there. Panasonic plans to use these materials in its batteries at two US factories. Panasonic has long supplied batteries to Tesla.

Over time, Redwood plans to increasingly recycle old batteries to extract expensive metals used in anodes and cathodes, helping to reduce the nation’s dependence on mined metals, many of which are found in other countries.