Another $3.5 billion for America’s expanding “battery belt.”

Battery company Redwood Materials is investing $3.5 billion in a massive new South Carolina recycling and manufacturing campus that will produce enough components to power a million electric vehicles.

Why is it important? It’s the latest in massive investments in America’s “battery belt,” fueled by new government policies and tax credits designed to spur development of the domestic EV supply chain.

Location: At least 21 U.S. battery “giant factories” have been announced by early 2021, worth a total of $54.3 billion, according to a study by the Federal Reserve Bank of Dallas.

• Domestic capacity is expected to grow more than fivefold from 2021 to 2026, projects Benchmark Mining Intelligence, a battery research firm. By 2031, US capacity is expected to expand another 86 percent.

What they say: “The federal government has put together some pretty clear and important incentives that will guide the direction of this transition,” said Redwood Materials CEO JB Straubel, Tesla’s co-founder.

• “There’s an incredible amount of investment and economic activity coming into the United States, which is proof that it’s working,” he said.

driving news; Redwood’s new battery materials campus, announced today, will be built on a 600-acre site near Charleston, South Carolina.

• A total of 1,500 jobs will be created by the end of 2023 in each phase.
• Currently, Redwood plans to produce 100 GWh of battery units per year. But the sprawling facility has room to expand to “hundreds of GWh per year” to meet future demand, Straubel says.

Between the lines; Redwood’s technology fills a unique gap in the battery supply chain – the company now recycles and processes expensive anode and cathode materials made exclusively in China.

• Those American-made components are in high demand, as automakers now require domestically produced parts to qualify for government incentives.

How it works: Redwood has a goal of recycling, refining and refurbishing battery materials, ultimately creating a sustainable, closed-loop supply chain.

• The company collects end-of-life batteries from EVs – as well as consumer electronics such as phones and laptops – and their base metals such as nickel, copper, cobalt and lithium.
• It then processes those materials into new battery cathodes and anodes – the most critical and expensive parts of AVs.
• “If we can recycle a battery in the U.S., it’s equivalent to extracting that material in the U.S. We can do this much faster than starting a new lithium, cobalt or nickel mine in the U.S.,” Straubel says.

The main point is: The more batteries that are produced or recycled in the US, the less geopolitical risk the country has to rely on foreign supply chains.

Yes, but: Despite recent investments, the US still won’t have enough battery capacity to meet expected EV demand by the end of the decade.