REDWOOD Materials, the battery recycling company from Tesla co-founder JB Straubel, declared it had reached a deal to supply Panasonic with billions of dollars in critical battery components that will be produced in the US for the first time, reports Bloomberg.
The agreement marks the first major contract for domestically processed cathode material, a substance that is one-third of the expense of a finished battery pack.
The material will supply Panasonic's new battery plant in Kansas City, Kansas, when mass production begins there in 2025.
"Panasonic has been a partner for many years, but this is very significant," said Mr Straubel.
"This is a large portion of their cathode supply. It's such an impactful announcement for the US supply chain in general - and of course, for us as a company."
Mr Straubel declined to specify the amounts of material to be supplied or the specific price structure.
Mr Straubel left Tesla in 2019 after he grew concerned about a widening gap between electric vehicle demand and the available materials needed to make them.
After, Redwood became the biggest lithium-ion battery recycler in the US before branching out into anode and cathode production.
Mr Straubel declared the materials in Redwood's cathode will help electric vehicles qualify for new US$7,500 federal tax incentives under guidelines that will happen between now and 2024.
To qualify for the full incentive under President Joe Biden's 2022 Inflation Reduction Act, half of a battery's minerals must be recycled in North America or mined from a country where the US has a free trade agreement.
"We were already going at supersonic speeds," said Mr Straubel, but the manufacturing provisions in Biden's climate plan were "like what happens if you attach a rocket engine to supersonic airplane."
Currently, most battery recycling consists of consumer electronics and scrap material from factories.
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