Exclusive-U.S. battery startup Redwood Materials sets deal with Korea’s L&F
October 27, 2021
By Paul Lienert
(Reuters) – Redwood Materials has forged an alliance with Korean battery materials maker L&F Co that the four-year-old Nevada startup believes can transform it into one of the world’s largest battery component manufacturers over the next decade.
In a multi-year deal, Redwood will use L&F’s design and manufacturing technology at a new $1 billion U.S. facility to make enough battery cathodes to supply up to 1 million electric vehicles a year by 2025 and more than 5 million by 2030, Redwood told Reuters on Wednesday.
Other details were not disclosed.
The L&F partnership is the latest element in Redwood Chief Executive J.B. Straubel’s vision of building a “closed loop” or circular supply chain for EV batteries, from raw materials to recycling.
Redwood currently recycles material such as lithium, cobalt, copper and aluminum from several sources, including the Nevada battery plant that is jointly owned and operated by Panasonic Corp and Tesla Inc. That factory has the capacity to make batteries for about 350,000 electric vehicles a year.
Straubel, a co-founder of Tesla, left the company to start Redwood in 2017. The L&F partnership is the second major alliance he’s announced in the past month.
In September, Redwood said it would supply anode and cathode material to Ford Motor Co, which has a U.S. joint venture with Korean battery maker SK Innovation to make EV battery cells.
L&F supplies battery materials to SK as well as to Korea’s LG Energy Solution and Samsung SDI.
The L&F alliance will enable Redwood to scale its annual cathode manufacturing capacity in the U.S., from a planned 100 gigawatt-hours in 2025 to 500GWh by 2030. The deal covers the U.S. and Europe, but not Asia, where most EV battery production is located.
In July, Redwood raised $700 million from investors, including Amazon.com Inc, Fidelity, T. Rowe Price and Baillie Gifford. Redwood is valued at $3.8 billion by investor website PitchBook.
(Reporting by Paul Lienert in Detroit; Editing by David Gregorio)