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Tesla co-founder’s battery startup Redwood lays off dozens
Redwood Materials, the US battery recycling company founded by Tesla co-founder JB Straubel, has laid off dozens of employees this month as it shifts focus toward grid-scale battery demand.
The cuts affected about 5% to 6% of Redwood’s workforce and included cathode material engineering roles, according to people familiar with the matter.
Redwood, founded in 2017, collects and repurposes end-of-life battery cells and produces battery materials at facilities in Nevada and South Carolina.
The company is now prioritizing the extraction of critical minerals and repurposing old battery packs for grid storage, amid rising competition and lower profit margins in the US battery recycling sector.
🔗 Source: Bloomberg
🧠 Food for thought
Implications, context, and why it matters.
Redwood’s shift signals midstream reality
- Cuts in cathode active material (CAM) engineering matter because CAM is the most valuable, complex part, about 60% of cell cost and 15% of EV cost 1. North America makes under 1% of CAM while China processes over 50% of lithium and two thirds of cobalt 1.
- Layoffs hint at a rethink on pace against Asian players. It holds multibillion dollar offtake deals (long term purchase commitments) with Toyota and Panasonic 2, yet the Nevada cathode plant is unfinished with no set opening date.
- A shift to mineral recovery from end of life batteries plus refining for grid storage looks more defensible. The model uses 80% less energy and 70% fewer CO2 emissions than virgin materials 2.
Second life integrators see certification openings
- UL 1974 providers can bundle certification, analytics, plus warranties to make second life assets acceptable to utilities and project finance lenders 3. UL 1974 covers sorting, grading, and evaluation of cells for continued viability 3. Certification can speed permits with local authorities 4.
- Software firms, plus testing labs, can build tools when each battery needs its own review given varied usage histories 5. Standardized frameworks can cut evaluation costs. They can also speed timelines for energy storage system integrators (companies that assemble batteries, inverters, and controls into grid storage projects).
- Insurers can craft coverage for fire or explosion risks at repurposing sites. New 2024 International Fire Code rules set safety measures for lithium ion storage in these operations 6.
