Redwood Materials was founded in 2017 by JB Straubel, former Tesla co-founder and CTO, to address the growing need for sustainable battery materials in the electric vehicle industry.

Redwood Materials found product-market fit as a battery recycling and materials production company for major battery manufacturers and automakers, starting with a crucial partnership with Panasonic at Tesla's Nevada gigafactory in 2019.

The company operates a closed-loop battery recycling system that processes end-of-life batteries and manufacturing scrap from consumer electronics and electric vehicles. Their process extracts valuable materials like cobalt, nickel, and lithium, which are then refined and remanufactured into battery-grade materials.

At their facilities in Nevada and South Carolina, Redwood produces two key products: anode copper foil and cathode active materials, which are essential components for new battery production. These materials are supplied directly to battery manufacturers, creating a domestic supply chain alternative to traditional Asian sources.

The company has expanded its recycling capabilities to handle various sources of lithium-ion batteries, from electric vehicles to consumer electronics like phones and laptops. Through partnerships with major automakers and battery manufacturers, Redwood's recycling and production system helps address the growing demand for sustainable battery materials while reducing dependence on newly mined resources.

Redwood Materials is a battery materials company that operates a closed-loop supply chain for critical battery components through recycling and remanufacturing. The company generates revenue by processing end-of-life batteries and manufacturing scrap to extract valuable materials like lithium, nickel, and cobalt, which it then refines and sells back to battery manufacturers.

The company monetizes through two main channels: recycling services for battery manufacturers and electronics companies, and sales of refined battery materials including cathode active materials and copper foil. Key customers include major automakers and battery producers like Panasonic, Ford, and Volkswagen who pay both for recycling services and to purchase refined materials for new battery production.

Redwood's competitive advantage stems from its vertically integrated approach - by both recycling materials and manufacturing refined components, it captures value across the supply chain while reducing dependence on foreign material sources. The company's strategic partnerships with major automotive and electronics manufacturers provide guaranteed material supply through recycling agreements and committed purchase contracts for refined materials.

The business model benefits from strong network effects, as more recycling partners increase material supply, enabling larger-scale refined material production and attracting more battery manufacturers as customers.

Redwood Materials operates in the battery recycling and materials processing market, which is rapidly expanding due to growing EV battery demand and supply chain pressures.

Traditional battery recycling companies like Li-Cycle, Battery Resourcers, and American Battery Technology Company focus primarily on processing end-of-life batteries. These companies typically use hydrometallurgical or pyrometallurgical processes to extract raw materials but don't generally remanufacture battery components.

Asian companies like CATL, LG Chem, and SK Innovation dominate the battery materials manufacturing landscape, controlling much of the world's cathode and anode production. These companies have established recycling operations but primarily focus on new material production from mining sources. Several are now expanding into North American markets with new manufacturing facilities.

A new category of companies is attempting to create closed-loop battery supply chains. American Manganese and Ascend Elements are developing proprietary recycling technologies that can directly feed into battery manufacturing. These companies differentiate themselves by focusing on specific parts of the value chain - some specializing in collection and sorting, others in material processing or component manufacturing.

The competitive landscape is shifting as major automakers establish strategic partnerships and invest in recycling capabilities. Companies like Ford and Volkswagen have announced partnerships with recyclers to secure domestic supply chains, while battery manufacturers like Panasonic are vertically integrating recycling operations into their production facilities.

Redwood Materials has tailwinds from the rapid growth of electric vehicle adoption and battery manufacturing, alongside increasing government support for domestic battery supply chains, with opportunities to expand into broader materials processing and international markets.

The global lithium-ion battery market is expected to grow exponentially as EVs become mainstream. China currently processes 59% of lithium and 75% of cobalt globally, while North America processes just 3% of each. Redwood's recycling and materials processing capabilities position it to capture a significant portion of this market as automakers seek domestic suppliers to meet IRA requirements. The company's target of 500 GWh annual production capacity by 2030 could supply materials for 5 million EVs.

Beyond recycling, Redwood can expand into virgin materials processing and advanced manufacturing. Their copper foil production facility demonstrates this capability, addressing a critical supply chain gap where the U.S. typically exports hundreds of thousands of tons of copper annually. This positions them to become a key domestic supplier of specialized battery materials, potentially expanding into other critical minerals and advanced materials manufacturing.

While currently focused on North American operations, Redwood has identified Europe as its next target market. The European Union's aggressive EV adoption targets and strict battery recycling requirements create natural expansion opportunities. Their proven recycling technology and manufacturing capabilities could be replicated in multiple regions, creating a global network of facilities to serve major automotive manufacturing hubs.

Supply chain dependency: Redwood's success hinges on establishing reliable streams of battery waste and scrap from manufacturers and consumers. A shortage of recyclable materials could leave expensive processing facilities underutilized. The company's growth trajectory assumes rapid EV adoption and battery production, but any slowdown could impact material availability.

China competition: China's established battery recycling industry has significant cost advantages and processing capacity. Chinese companies could expand internationally and undercut Redwood's prices for refined battery materials. The geopolitical push for US supply chains may not be enough if the cost differential becomes too wide.

Technology lock-in risk: Redwood's massive capital investments in current recycling technology could become stranded if battery chemistries shift dramatically. New battery technologies using different materials or formats could require completely different recycling processes. The rapid pace of battery innovation means today's recycling methods may not be optimal for tomorrow's batteries.