Tidying up after Musk: How Tesla’s former tech director makes money on old lithium-ion batteries
Engineer Jeffrey Brian Straubel, who helped Ilon Musk turn Tesla into an auto industry giant, sees the future in electric cars. And he believes in the incredibly lucrative market for precious metals recovered from old batteries
Four years ago, Tesla CTO Jeffrey Brian Straubel was actively engaged in boosting lithium-ion battery production at a plant near Reno, Nevada. It was then that he caught fire with the idea of creating a company that would specialize in recycling waste generated during battery production. The engineer realized that metals could be extracted from such waste and other spent electronics and then recycled into usable lithium, cobalt and graphite to make new lithium-ion batteries.
Straubel realized that if you could figure out how to inexpensively recycle waste on a large scale, you could really change the world. On the one hand, recycling would increase the amount of recyclable rare and valuable metals. On the other hand, the environmental damage caused by mining could be reduced, and toxic substances from old lithium-ion batteries could be kept out of landfills.
In 2020, Straubel founded Redwood Materials in Carson City. He positioned his project as a “next generation metals recycling company.” At the time, Straubel was still working at Tesla, of which he is one of the founders, along with Ilon Musk and three other engineers.
“Electrification everywhere is gaining momentum, which is driving demand for lithium-ion batteries,” Straubel, 45, says. “Our mission at Tesla was to help accelerate this process and generate excitement around electric cars. It’s great to see it happen, but it’s happening even too fast and ahead of supply chain capabilities,” adds the engineer.
In 2020, Tesla sold about 500,000 electric cars, each of which requires thousands of lithium-ion batteries. Sales of Tesla vehicles are expected to grow by 50 percent in 2021. Demand for lithium-ion batteries is also on the rise, as both auto industry giants like General Motors and Volkswagen, and relatively small automakers like Lucid and Rivan are actively pursuing plans to ramp up vehicle production. In this regard, the prices of key raw materials for lithium-ion batteries, including cobalt (up 69% in the last 12 months) and lithium (up 127% in the last 12 months) are skyrocketing.
Straubel is happy to share the first good news: after just one year of operation, Redwood Materials is able to recover tons of recyclable metals from waste and used electronics. And the cost of this process is lower than the total cost of mining metals in the mines.
“Most people seem to expect the opposite. They think recycling costs too much today, but will probably become cheaper in the future. In fact, metal recycling today is competitively priced,” Straubel says. “Our goal is to get recycling to be even more price competitive. Then we could increase recycling,” adds the founder of Redwood Materials.