Panasonic inks multi-billion dollar supply deal with Redwood Materials for high-nickel cathode

redwood
Credit: Redwood Materials

Redwood Materials has announced a new deal with Panasonic in which the Tesla battery supplier will purchase remanufactured battery cathode material for its new facility in Kansas.

Cathode material includes all of the critical ingredients for an electric vehicle (EV) battery, like lithium, nickel, and cobalt. As a result it accounts for over half the cost of a battery cell according to Redwood.

In announcing the new partnership, Redwood Materials says it will be the first time cathode has been produced in North America at Gigafactory scale and used in U.S. battery cell manufacturing.

Redwood Materials expands to Europe

Panasonic plans to begin receiving the high-nickel cathode from Redwood in 2025 when it starts production at its new battery plant in Kansas, which started construction earlier this month. The facility will has a planned capacity of 30 gigawatt hours (GWh) per year when complete.

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.

Redwood Materials is based in Nevada and was started in 2017 by Tesla co-founder JB Straubel. The company first partnered with Panasonic in 2019 to recycle scrap from its battery production operations at Giga Nevada.

Redwood announced earlier this year it was expanding from battery materials recycling into the world of anode and cathode production.  The company will be spending billions of dollars to ramp up production to 100GWh per year by 2025, enough to supply 1 millions EVs.

By 2030 the company hopes to increase their capacity to 500GWh per year.

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The financial terms of the deal with Panasonic were not disclosed, but according to a report from Reuters it is worth several billion dollars.

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