Key Takeaways
- Tesla cofounder JB Straubel’s company Redwood Materials recycles 90% of North America’s lithium-ion batteries
- Recycling EV batteries could dramatically reduce US dependence on China for critical minerals
- Redwood processes 250,000 EV batteries annually but has potential for 10x expansion
Tesla cofounder JB Straubel has identified a powerful solution to America’s critical minerals crisis: recycling used electric vehicle batteries. His company, Redwood Materials, is leading a national effort to create a domestic supply chain for rare earth minerals by recovering valuable materials from retired EV batteries.
The China Dominance Problem
China currently controls over 80% of global battery materials production and dominates supply chains for what the US government classifies as “critical minerals.” These 60 natural elements are essential for everything from military equipment to AI data centers and smartphones.
The geopolitical tension escalated earlier this year when the US launched tariff measures against China, prompting Beijing to threaten withholding rare-earth minerals. This forced Washington to accelerate investments in domestic mining, refining, and recycling capabilities.
Recycling as National Security Solution
“Being able to tap into materials that are already in the market can dramatically reduce the pressure on what’s needed to mine,” Straubel told Fortune. “Once you have some diversity of supply, you reduce the risk of the [Chinese] monopoly and the geopolitical concentration.”
Redwood Materials has become America’s primary defense against mineral supply chain vulnerabilities. The company already processes approximately 250,000 EV batteries annually, representing 90% of lithium-ion battery recycling in North America.
Massive Expansion Potential
Despite controlling 90% of the recycling market, this represents only about 10% of annual EV battery deployment in the US. This means Redwood could expand its capacity tenfold even if EV adoption rates remain unchanged.
Straubel calls Redwood’s facilities “urban mines.” The company operates from its Nevada campus and a new $3.5 billion, 600-acre plant in South Carolina, with recent strategic investment from chip giant Nvidia.
Creating a Circular Economy
“The end goal is creating a circular economy where recycling—not mining—becomes the primary source of the minerals,” Straubel explained. “You’re decoupled from the geologic mine from where these things are naturally found in the earth.”
Through its recycling efforts, Redwood has already become the nation’s leading producer of recycled cobalt and ranks near the top for lithium and nickel production.
Beyond Recycling: Energy Storage Systems
Redwood is also developing battery energy storage systems (BESS) using recycled materials. The company has already deployed a battery-storage microgrid for OpenAI’s Stargate data center campus in Texas.
“As EVs and other energy storage products proliferate in the market, we have this incredible opportunity to evolve toward this materials economy for those products that will be 98% or 99% remanufactured over time,” Straubel added.
While EVs remain Redwood’s primary battery source, the company recycles lithium-ion batteries of all shapes and sizes, creating a comprehensive solution to America’s critical minerals challenge.
