In the USA, Redwood Materials was approved for more than $105.6 million in tax incentives for its battery recycling and materials facility in Northern Nevada in exchange for $1.1 billion in capital investments at its Storey County facility.
According to the Reno Gazette Journal, Redwood Materials was awarded tax credits and multiple abatements on 1 December by the state of Nevada. Redwood Materials is the first company to receive a new incentive for projects that invest $1 billion or more in the state.
The idea for this kind of exchange was first floated some time ago with the troubled electric car startup Faraday Future – which did not eventuate. In the ensuing period, Redwood Materials, which was founded by ex-Tesla CTO JB Straubel, has shown itself to be an ideal candidate for this kind of exchange. The young and ambitious battery recycling company now has agreements with Envision AESC, Ford, Volkswagen, Panasonic, Volvo, Toyota and Lyft among others. Redwood Materials also has multiple connections with partners with battery operations in Nevada, such as Panasonic (and therefore also Tesla) and Toyota.
Nevada Governor Steve Sisolak says of Redwood’s recycling project: “It’s an absolutely amazing operation.” He explained, “We’re going to put a lot of people to work and relieve some of our dependence from foreign supply chains.”
The employment and economic estimates come financial impact analysis submitted as part of Redwood Materials’ application, citing 701 jobs — 225 of which will be created by June 30, 2025. This should pay off well for the state government if all goes to plan. The Redwood Materials project in Nevada is also expected to generate more than $106 million in direct local and state tax net revenue as well as indirect tax revenue of $77.3 million.
The supply of battery materials is now generally acknowledged as a geopolitical issue. While the vast majority of battery raw materials are currently sourced and processed by China, every region that masters battery reuse and recycling industries can keep these materials within its own economy. Michael Brown, executive director of Nevada Governor’s Office of Economic Development (GOED) explained that the ability to provide more battery materials from within the United States is especially important for both its industry and national security implications: “It’s a big reason why the company has “strong support” from the US Department of Energy,” he added.
Company founder Straubel surmised: “By offering the first large-scale domestic sources of these battery materials that can go directly to US battery manufacturers, Redwood Materials will be making Nevada a significant supplier of critical minerals for the nation.”
In January this year, the US federal government announced it would invest almost $3 billion in the battery supply chain. Just a few months ago, the US Department of Energy announced funding for 20 battery companies for the construction and expansion of factories in 12 states. Last year, Redwood Materials announced that it was moving beyond pure battery recycling to start producing battery materials from recycled materials starting this year. The US-American company is also planning two plants in Europe.
Keyword: Redwood seals deal with Nevada Governor’s Office