Energy Dept. Will Lend $2 Billion to a Battery Component Maker
The Energy Department on Thursday announced a $2 billion loan to help a Nevada company step up production of critical components of electric vehicle batteries.
The company, Redwood Materials, plans to use the loan to expand a manufacturing campus near Reno, Nev., where it makes some of the components from new and recycled sources. The company was founded by J.B. Straubel, a former top Tesla executive, and has partnerships with Panasonic, Ford Motor, Toyota, Volkswagen and Volvo.
After construction is complete, Redwood aims to produce enough battery materials at the Nevada campus to support production of more than one million electric vehicles a year. The loan will help to create about 3,400 construction jobs, Redwood and the Energy Department said. The company said it expected about 1,600 full-time employees to work at the campus when it was finished.
The announcement was the latest loan from the department to support domestic battery manufacturing as the Biden administration seeks to bring more of the supply chain for electric vehicles to the United States and reduce reliance on China. Last month, the department said 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-making joint venture between General Motors and LG Energy Solution.
During the Obama administration, the Energy Department made 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 during the Trump administration. After taking over, President Biden put a renewed emphasis on green energy and zero-emissions vehicles in an effort to address climate change.
In a statement about the Redwood loan, the Energy Department said the “project marks a significant step towards meeting the Biden administration’s target of making half of all new vehicles sold in 2030 zero-emissions vehicles, including battery electric, plug-in hybrid electric or fuel cell electric vehicles.”
Anodes and cathodes, two important components of every battery, are mainly produced in Asia, but Redwood and handful of other U.S. businesses are trying to change that. Last month, the company began producing anode copper foil at its Nevada campus, and it is working toward producing cathode materials there, too. Panasonic plans to use those materials in its batteries at two U.S. factories. Panasonic has long supplied batteries to Tesla.
Over time, Redwood plans to increasingly recycle old batteries to extract the expensive metals used in anodes and cathodes, helping to reduce the nation’s reliance on metal extracted from mines, many of them in other countries.
