The Department of Energy on Thursday announced a $2 billion loan to help a Nevada company ramp up production of critical electric vehicle battery components.
Redwood Materials plans to use the loan to expand a manufacturing campus near Reno, Nevada, where it will make some of the components from virgin and recycled sources. The company was founded by JB Straubel, a former Tesla executive, and has partnerships with Panasonic, Ford Motor, Toyota, Volkswagen and Volvo.
Upon completion of construction, Redwood plans to produce enough battery materials at its Nevada campus to support the production of more than one million electric vehicles per year. The loan will help create about 3,400 construction jobs, Redwood and the Department of Energy said. The company expects that approximately 1,600 full-time employees will work on the campus upon completion.
The announcement was the department’s latest loan to support domestic battery manufacturing as the Biden administration looks to bring more of the electric vehicle supply chain 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 manufacturing joint venture between General Motors and LG Energy Solution.
During the Obama administration, the Department of Energy did one $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 office, President Biden put a renewed focus on green energy and zero-emission vehicles to address climate change.
In an opinion About the Redwood loan, the Department of Energy said the “project is a significant step towards meeting the Biden administration’s goal of making half of all new vehicles sold in 2030 zero-emission vehicles, including battery electric, plug-in hybrid electric vehicles or Fuel Cell Electric Vehicles.”
However, anodes and cathodes, two important components of every battery, are mainly produced in Asia Redwood and a handful of other US companies are trying to change that. Last month, the company began producing anode copper foil at its Nevada campus and is working to make cathode materials there as well. Panasonic plans to use these materials in its batteries at two US 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 and help reduce the country’s reliance on metals extracted from mines, many of them in other countries.
