Tesla’s meteoric stock rise has overshadowed a big development in the electric vehicle (EV) space.
In July 2020, EV and hybrid vehicles hit a record 18% of total car sales in Europe. Globally, Bloomberg estimates that EVs will make up nearly 3 out of every 10 new car sales a decade from now. By 2030, they estimate worldwide EV sales will jump from 1.7m to 26m units.
Creating enough batteries — which rely on inputs of nickel, cobalt and lithium — to meet this demand is an environmental disaster in the waiting.
As things stand now, going green isn’t fully clean.
Last year, Straubel left Tesla to focus full time on his materials recycling startup, Redwood Materials.
Per the WSJ, the Wisconsin native met Elon Musk in the early 2000s, shortly after the South African entrepreneur had scored a 9-figure payday with his Paypal exit.
One thing led to another and Straubel became an early hire at Tesla. He made such significant contributions (e.g. the lithium-ion battery powertrain) that Musk “considers him a co-founder” of the EV car company.
Traditionally, sourcing the raw materials for EV batteries has involved the exploitation of foreign resources, child labor, and squalid working conditions.
Straubel wants to reduce this dependence by extracting metals from old batteries — a process that involves powderizing them in industrial ovens heated to 2.7k degrees F.
The company is also looking into saving the 10% of raw materials wasted by battery manufacturers in the cell-making process.
The WSJ article notes that raw materials now account for 50%-75% of the cost of an EV battery, making recycling services like Redwood Materials an attractive business opportunity.
Straubel’s investors include Breakthrough Energy Ventures, a clean energy fund supported by Jeff Bezos and Bill Gates. The funding will help Redwood perfect its battery-recycling process
Though Straubel is still friendly with his former employer, he has not taken an investment from Tesla. He wants to create a solution for “the entire automotive industry”, meaning for any battery and car design, not a single automaker.