Ford invests $50M, partners with Tesla co-founder's battery-recycling company

DETROIT — Ford Motor Co. is investing $50 million in Redwood Materials, a battery-recycling company created by Tesla co-founder J.B. Straubel, and plans to partner with the startup to eliminate waste and eventually reuse components from its impending wave of electric vehicles.

The partnership, announced Wednesday, is still in its infancy but will begin with Ford tapping Redwood to recycle its EV production scrap and, eventually, end-of-life EV batteries. Redwood last week announced plans to manufacture EV battery cathodes and other components from the recycled material it receives, and Ford said it could use such components in future vehicles to create a sustainable, closed-loop production system.

"Our partnership with Redwood Materials will be critical to our plan to build electric vehicles at scale in America, at the lowest possible cost and with a zero-waste approach," Ford CEO Jim Farley said in a statement.

Ford is investing $30 billion in electrification through 2025, with plans to bring an EV version of the F-150 pickup to market next year. It plans to spend more on EVs than internal combustion vehicles in 2023.

With virtually every automaker in the midst of electrifying its portfolio in some fashion, there's a growing concern that battery production demand will soon overcome supply.

Redwood says its recycling technology can recover, on average, more than 95 percent of the elements such as nickel, cobalt, lithium and copper found in batteries and scrap. Lisa Drake, Ford's North America COO, said that capability could help alleviate future supply concerns.

"This approach will help ensure valuable materials in end-of-life products reenter the supply chain and do not wind up in landfills, reducing our reliance on the existing commodities supply chain that will be quickly overwhelmed by industry demand," she said in a statement.

Ford has announced plans to form a joint venture with SK Innovation, called BlueOvalSK, to eventually manufacture batteries at multiple sites in the U.S.

Straubel, Redwood's CEO who formerly was in charge of Tesla's battery production, told reporters on a call that Ford has quickly become "a strong leader" in the EV space.

"Planning now for the end of life of these batteries in these vehicles is really necessary," he said. "Overall, I think there are not many automakers that are thinking as far ahead as Ford is in this regard. Many people are sort of looking at the very first steps of how they electrify their fleets and with Ford, it's exciting for us to be looking quite a few steps ahead."