Panasonic secures massive high-nickel cathode deal with Tesla co-founder’s Redwood

Redwood Materials, a company founded by Tesla co-founder JB Straubel, announced that it will supply high-nickel cathode material for battery cell production in Panasonic’s new Kansas plant.

The company believes that this will be the first time cathode material will be produced in North America at “Gigafactory scale”.

Redwood Materials has been best known as a Nevada-based company developing new processes to recycle materials with a focus on electric car batteries, but the company recently announced that it is also getting into cathode and anode production with a 100 GWh battery material factory in the US.

Straubel said that the ultimate goal of Redwood Materials is to create a full-cycle battery material company in North America, which has been lacking in cathode and anode material production – an industry that has been dominated by China.

When Straubel left Tesla in 2019 to focus full-time on Redwood Materials, Tesla fans were disappointed because the engineer was critical to the company’s technological success. However, we suspected that Redwood Materials would eventually collaborate with Tesla and help the automaker solve some supply issues in the future.

It sort of already happened as the company reached a deal to supply Panasonic with copper foil at Tesla Gigafactory Nevada where Panasonic produces battery cells for Tesla.

Now Redwood and Panasonic are strengthening their partnership with a cathode material supply contract, which is groundbreaking for the North American market:

Panasonic will source Redwood’s cathode material for battery cell production in Panasonic’s new Kansas plant, targeted to come online in 2025. This will be the first time cathode has been produced in North America at Gigafactory scale and used in U.S. battery cell manufacturing, a critical milestone for the domestic supply chain and one of the key objectives of the recent Inflation Reduction Act.

This new Panasonic plant in Kansas was recently made official with a planned capacity of 30 GWh per year. There are many projects to build battery cells for electric vehicles in North America, but the supply chain behind battery cell production is still young in the region, and Redwood plans to help it mature fast.

The plant is expected to enter production in 2025 around when Redwood also plans to have achieved volume production of its own cathode materials.

Redwood plans to ramp production of its cathode material to 100 GWh, enough for 1 million EVs by 2025.