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Will a former Tesla top manager make money on waste?

Business
29.08.2020
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Will a former Tesla top manager make money on waste?

Former Tesla CTO “JB” Straubel launched his own company Redwood Materials to recycle batteries and battery waste. Thanks to this, the founder hopes to reduce the cost of batteries. Thus, the price of electric vehicles can become cheaper and more accessible to a wide range of buyers.

Even though Tesla has become the most expensive car maker in terms of capitalization this year, electric cars are still sold at a large mark-up compared to other cars. McKinsey analysts have calculated and found that the average markup is about $12,000.

Batteries make up a significant part of the markup. It is worth noting that thanks to Tesla, it was possible to reduce it, since previously automakers used massive and non-durable batteries that didn’t hold charge for a long time. Then Tesla, together with Panasonic, opened a separate production facility in Nevada, where the batteries are assembled. Today such factories are opened in China almost every day.

At the moment, a significant part of the batteries cost is made up of chemical components, the prices of which have recently increased. They are mined much slower than before. As a result, demand rises, and production is carried out in politically unstable places, which also threatens the market. Elon Musk himself pointed out the shortage of components, he noted that the company is ready to conclude a large and long-term contract with new suppliers of nickel if the metal is mined “in an efficient and environmentally friendly way.”

Straubel also deals with the problem of the lack of metals. He was the author of several key Tesla technologies, due to which he is sometimes called one of the founders of the company. The engineer strives to create the most convenient recycling technology for batteries used in cars. He is confident that he will soon be able to create a new way of assembling batteries from recycled waste.

During the first investment stage, the startup received about $40 billion. Breakthrough Energy Ventures, which is mainly engaged in supporting environmentally oriented projects, became one of the main investors. It involves Amazon creator Jeff Bezos and ex-Microsoft CEO Bill Gates.

Today Redwood Materials is recycling smaller batteries from phones and other gadgets in order to gain experience. It is not yet known whether this will become a popular industry. The founder of the company hopes that this will help cut the cost of batteries in half.

Author:Елена
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