A battery is dismantled (here at Volkswagen): Elephant race for the market of the future
Photo: FABIAN BIMMER / REUTERS
In the global electric car boom of recent years, Jeffrey Brian "JB" Straubel played a similarly important role as his far more famous, decades-long business partner Elon Musk. Straubel was already working for Tesla when Musk joined the electric car start-up as an investor – and he helped shape its rise to become the most valuable car company on earth for a long time.
Behind the bombastic Musk, Straubel was the silent tinkerer and chief technology officer during these years, who developed Tesla's batteries, electric drives and factories into the leading ones in the industry. In return, Straubel, like Musk, can now call himself Tesla co-founder, which the company even fought in court in 2010 against its original founder, who was at odds with Musk.
In 2019, Straubel left Tesla to dedicate himself to solving a new problem that he largely created himself with his company Redwood Materials: the recycling of batteries, especially the mattress-shaped battery packs of electric cars. Redwood already operates one factory in the USA, and the company is currently building two more.
Now he is expanding to Germany with Redwood. The company from the US state of Nevada buys the local battery recycler Redux Recycling and its plant in Bremerhaven with 70 employees, where up to 10,000 tons of lithium-ion batteries can be dismantled per year. According to Straubel, this makes it the largest such plant in Europe. So far, Redux has been owned by the Austrian recycling company Saubermacher. The two companies say nothing about the purchase price.
Only part of the cycle in Germany
Straubel has been talking about expanding into Europe for more than two years. "We spoke with virtually every battery recycler in Europe, and this was the ideal project," the Redwood boss told SPIEGEL. The fact that he buys an existing factory instead of building his own is mainly due to time reasons: "We have the supply chains, all the machines and permits to get started immediately." After all, the latter in particular are an ongoing issue in Germany.
The high energy prices in Germany made the Tesla alumnus flirt at times with the idea of building a new battery recycling plant in Scandinavia. Investing elsewhere in Europe is not off the table yet, says Straubel. The plant in Bremerhaven covers the less energy-intensive part of recycling, shredding into so-called black mass.
In order to process these into anode and cathode material for new batteries using a lot of energy, Redwood plans to operate even more plants in Europe in the future. The goal, according to Straubel, is a closed loop that reduces the import of critical battery minerals such as nickel or cobalt from crisis regions.
Bremerhaven's proximity to the port speaks in favour of being able to import batteries from all over Europe that have been taken out of service by ship. And the one about the German car industry, of course. VW is currently building a battery factory in Salzgitter, which is located about 250 kilometers southeast of Bremerhaven. According to Straubel, its recycling plants must be located within a radius of 1000 kilometers around the car factories for recycling to make ecological and economic sense. With the Bremerhaven location, it can reach plants in France, Belgium or Sweden – and each in Germany.
War chest with billions of dollars
Tesla's gigafactory in Grünheide is also within the 1000 kilometers. Although Straubel has been a member of the supervisory board of his old employer since May, he tends to distance himself from Redwood. In the U.S., the recycler works with Toyota and Volkswagen, among others, but not with Tesla. Redwood is currently building his second plant for one billion dollars in South Carolina, in the orbit of the US plants of BMW, VW, Mercedes and far away from Tesla's gigafactories in California and Texas. This "reverse gigafactory", as Straubel calls it, will one day supply battery raw materials for one million electric cars.
In Germany, large companies are pushing into the promising market from various directions: car manufacturers such as VW want to recycle some of the batteries from their old electric cars themselves, and traditional recycling groups such as Umicore, raw material giants such as Glencore or the chemical company BASF are also interested.
This elephant race made the redwood deal possible in the first place: Saubermacher, a family-owned Austrian waste disposal company, preferred to sell to the US partner instead of throwing itself into the competition with the foreseeable huge investments. Redwood, on the other hand, has a full war chest: In August, the company received a billion dollars in investment capital, including from the investment bank Goldman Sachs. In addition, there is a two-billion-dollar loan from the U.S. Department of Energy.
In addition, Redwood sees itself as a technology leader. In Bremerhaven, for example, Straubel wants to introduce automated processes to classify and sort batteries more quickly according to their chemical composition. This is necessary because there will not be enough decommissioned e-car batteries in the first few years. Until then, Redwood will be able to utilize the plant with a higher proportion of medium-sized batteries, for example from power tools.
Finally, Germany has one advantage over its home country of the USA: "The batteries are collected here more frequently by the waste disposal companies," says Straubel. "Awareness of recycling is simply higher in Europe."