BCMRC24: Innovating to serve

At Redwood Materials, a battery recycling company headquartered in Carson City, Nevada, the biggest opportunity in the growing sector remains innovation.

When it comes to meeting the needs of its diverse range of customers that include automotive original equipment manufacturers (OEMs), retailers and even toy brands, the company’s goal is to create ways to close the loop for them.

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“It’s really about innovation and getting back to an all-roads approach at Redwood,” said Dustin Krause, the company’s vice president of North American sales and sourcing. “The thing that keeps me up at night is how do we become the easiest recycler to work with.”

Krause spoke during the closing keynote session of the Battery and Critical Metals Recycling Conference, hosted by Recycling Today in Atlanta in mid-June, and elaborated on his 15 years of experience in the electric vehicle (EV) and e-mobility industries and how they have changed, as well as recycling’s increasing role.

He was an early employee at Tesla, where he spent 10 years helping commercialize the automaker’s products, such as the Roadster, in North America and Europe. Later, he served as the head of e-mobility for the Volkswagen Group of America, where he helped launch the VW ID4 vehicle.

Working for OEMs has helped inform his work at Redwood.

“There are a lot of folks that are working in recycling that have a metals background, which is great,” Krause said. “[Redwood] has those people, too. But I think the competency that has really helped us and with me in this role has been our really diverse backgrounds.

“When I worked with some of our partners in the OEM space, for example, I know what it’s like to walk in their shoes. I know what it’s like to develop a vehicle. I know what it’s like dealing with [auto] dealers and all of that. So, I think that gives us a unique perspective and understanding of how to solve their problems and has been one of the reasons I think we’ve been successful in creating strong partnerships, particularly with vehicle OEMs.”

Doing it all

Since its founding in 2017, Redwood has placed itself at the forefront of the battery recycling industry in North America, sourcing end-of-life batteries and production scrap as well as raw materials and recycling, refining and remanufacturing those feedstocks into critical battery materials for North American cell manufacturers at gigafactory scale.

From its battery materials campus in northern Nevada, it uses a process it deems more sustainable than traditional methods of processing mined ore into battery-grade materials, using 80 percent less energy, generating 70 percent less CO₂ and requiring 80 percent less water. The company has said its proprietary hydrometallurgy process successfully reclaims 95 percent of lithium from scrap battery materials, and the recovered nickel, lithium and other metals are purified into intermediates or converted into chemicals for the production of high-grade cathode active materials.

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Another unique offering is the facility’s reductive calciner, which the company has said is the only one of its kind in North America and is crucial for processing all types of live battery feedstock. The thermal preprocess allows Redwood to handle live battery cells, consumer electronics and EV modules and can process more than 40,000 metric tons annually.

But it’s also what happens outside of the sprawling campus that excites Krause. He pointed out that Redwood does a little bit of everything when it comes to end-of-life batteries and production scrap.

“We have everything from collection, logistics, recycling,” he said. “We have a refining facility that’s been operating for nearly the last two years. We also make battery materials, which I think is also important.

“All under one roof, we can take an end-of-life battery or production scrap and then can produce that in one location back to battery-grade material, including cathode material and anode material as well.”

One example of the company’s collection efforts is a program it launched in California in early 2022 with partners Ford and Volvo Cars to develop efficient, safe and effective recovery pathways for end-of-life hybrid and EV battery packs. The program accepts all lithium-ion and nickel-metal hydride (NiMH) batteries discarded in the state. Additionally, Redwood has worked directly with dealers and dismantlers to identify and recover end-of-life packs, which it could then package, transport and recycle at its Nevada campus.

The company also has prioritized logistics as a service offering for its customers. Krause said the company will collect some material—usually gigafactory scrap—using its own trucks, but also can dispatch a network of providers that can pick up material from auto dealers, for instance.

“We have service-level agreements mostly with these OEMs that we have to pick up a module or battery pack within 72 hours,” Krause said. “I was looking at the metrics of that recently, and we are over 95 percent compliant with that. There are, of course, cases where you can’t get [to a customer] in 72 hours. But in general, we’re hitting that mark quite well.

“It’s [important to have] a really keen focus on your service offering because, at the end of the day, for an auto OEM or something like that that, that’s really what our value is. They want to get that battery pack off of the lot. If that battery pack has an issue, or is defective, it can burn down the dealership and they don’t want that. So, they want to make sure that we offer the highest level of service possible. That really is becoming our key focus.”

In October 2023, Redwood added another service when it launched a pricing tool for end-of-life EV batteries. Designed for dismantlers to value and sell recovered EV battery packs directly back to Redwood, the company said at the time that the online portal signified a significant step forward in how packs are handled at scale.

Using the pricing tool, dismantlers can secure instant offers for EV packs, and once they accept the sale, Redwood handles their transportation. The online portal integrates advanced tracking and management systems for end-of-life batteries, so that when they find their way through the yards of recyclers across the United States, the tool ensures each is accounted for, valued appropriately and prepared for recycling.

“It’s the only tool out there like that today,” Krause said. “We put it out in the market because we wanted to learn. … It’s about trying to put things in the market and see how they work. We’re going to move really fast. That’s a key tenant at Redwood is just moving ahead and moving quick.

The pricing tool represents a new way for a potential customer to consider doing business with Redwood.

“It’s very transparent in how it works. We’ll look to actually expand on that, too, to even offer some more offerings in there," he continued. "We’re continuing to think of more ways to more easily funnel material into Redwood at the most competitive rates for our customers and for more people just to want to work with us.”

Building partnerships

Redwood has built a range of partnerships in recent years spanning all types of batteries.

On the EV side, it has agreements in place with Ford, Volkswagen and Toyota. Also, it has partnerships with electronics manufacturers such as Panasonic, e-mobility retailers such as Seattle-based Rad Power Bikes and has even collected materials from toy brands such as Radio Flyer.

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Krause said Redwood works with nearly every OEM, which can include both EV and battery cell manufacturers, and performs battery pickups from dealerships. He noted the company’s partnership with the Volkswagen Group of America encompasses multiple brands including Audi, Bentley and Porsche, and represents more than 1,000 dealerships across the continent.

“Well over 1,000 dealerships at any given time might be doing a battery pack replacement or module work, so we need to very easily allow for a service manager, a parts manager or a technician to be able to say, ‘Hey, I did this work and now I have this, and you have 72 hours to pick it up,” Krause said. “It’s really about developing systems with them, and then making the process sticky. That’s a good thing for us, too. When we develop one of these tools that’s integrated deeply into something like an OEM or partner, that’s one of the reasons they would want to stay with Redwood, because it just works.”

The company’s most recent partnership was inked in May. Under the agreement, Redwood will recycle production scrap from Ultium Cells LLC’s facilities in Warren, Ohio, and Spring Hill, Tennessee. Ultium Cells is a joint battery cell manufacturing venture between General Motors and LG Energy Solutions.

In the pursuit of material to feed its process in Nevada, Krause said Redwood is willing to work with anyone.

“We'll work with anybody that’s really small all the way up to the big Ultium account,” he said. “We want to help everybody. Material is wherever you can get it. You try to get it, but you also need to do it in an economical way. And, so, the best way to do that is to try to do full truckload quantities rather than LTL shipments. So, we do look to do that.

“But, if there’s a company out there that needs help with recycling, no matter where they are, we’re going to step in and help them where we can and we’re going to try to make it feasible for both of us."

The right location

Redwood’s recycling campus is located near Reno, Nevada—about two miles from the Tesla gigafactory. It presents material sources close to home, but also gives Redwood relatively close proximity to California, where many of the first end-of-life EVs will be coming online in the coming years.

“We know that California was the first to adopt hybrids and EVs,” Krause said. “So, the end of life will come out of there first. And we are about as close to California as you can get without being in California there in Reno, so that’s good for us.”

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The company also is in the process of establishing its presence in the eastern part of the U.S. In late 2022, it announced it would build a battery materials campus on a 600-acre space near Charleston, South Carolina, with an initial planned capacity of 100 gigawatt hours of cathode and anode metals per year.

Krause noted that the new site coincidentally is located near a Volvo production facility and could start receiving material to process by the end of this year. He added that while much of Redwood’s business is concentrated in the western U.S., there is a “huge amount” of material on the East Coast, too.

“Once we can open up that location, that starts to give us the opportunity for that material,” he said. “We should see a nice, sizable increase in material once that site opens. It’s nestled nicely into a lot of the battery production base. … We think that Charleston location is going to be a great spot for brining in material in many ways. We have rail access directly to the site. We’re close to the Port of Charleston. It’s a large [site], but it’s a place that we can grow into for sure.”

Redwood also has operations in Europe, following its September 2023 acquisition of Germany-based battery recycler Redux Recycling GmbH.

Changing landscape

Years from now, Krause said the current balance of material recyclers like Redwood are acquiring, roughly a 50/50 split between production scrap and spent batteries, is likely to lean more heavily toward battery cells as they increasingly reach their end of life.

“I think that switch is going to be a big, big change,” he added.

The question, he said, is how the industry as a whole will react to that shift and get better at collection, as well as incentivize consumers to “do the right thing” and recycle.

“How do you get someone to take the junk out of the junk drawer and actually do the right thing with it?” Krause said. “I don’t know if anyone has really figured that out. There’s great work that [organizations] are doing, like Call2Recycle, but it is a difficult thing to do and there’s more stuff that’s sitting in the drawer, or in your garage or somewhere else. There’s just a lot of material out there. I might have a few batteries on me right now. … And how many of these batteries will actually get to recycling? That’s going to be the big thing.”

The continued growth of production capacity in North America will also influence the continued evolution of the industry. Krause noted that EVs are still in their infancy but will become more prominent over time.

“Not every product is maybe the most compelling right now,” he said. “But I think over the next generations of products they really will start to become that. That will also be a huge factor for the business, too, just overall how quickly will this [technology] be adopted.”