As the U.S. battles China’s dominance in battery materials, Tesla cofounder JB Straubel’s Redwood Materials is leading a seismic shift through “urban mining”—transforming used batteries into a new supply chain for critical minerals. Investors should pay attention: the next chapter of energy independence and EV growth may be written in American recycling plants, not mines.
JB Straubel, the cofounder of Tesla, is once again at the center of an American industrial revolution—this time, not building cars, but orchestrating a nationwide pivot toward battery recycling. After witnessing firsthand the immense volume of critical minerals locked inside spent electric vehicle (EV) batteries, Straubel’s Redwood Materials is taking on China’s stranglehold over the world’s mineral supply chains—a high-stakes move investors cannot afford to ignore.
China currently dominates over 80% of global battery materials production, and its grip extends across lithium, cobalt, copper, nickel, and other elements crucial for the energy transition and national security. The U.S., despite having 60 designated critical minerals by the government, produces only a small fraction. This geopolitical tension peaked recently with tariff wars and threats from China to withhold these resources, making supply diversification not just a logistical concern but a headline investment risk for every American EV or clean tech company.[Fortune]
Redwood Materials: From Nevada Start-Up to North American Powerhouse
Founded in 2017, Redwood Materials has rapidly established itself as the dominant recycled lithium-ion battery processor in North America. The company now claims control over roughly 90% of the continent’s battery recycling market—already handling the equivalent of 250,000 EV batteries per year. Still, that figure is roughly just 10% of the U.S. market’s annual EV deployment, suggesting enormous headroom for growth.[Fortune.com]
Straubel dubs Redwood’s facilities “urban mines”—a term reflecting their strategy to extract high-value minerals from previously used batteries rather than the earth. Recent investment and construction of a $3.5 billion, 600-acre recycling complex in South Carolina signal the scale and ambition of Redwood’s vision, while strategic partnerships (including with Nvidia) are drawing the attention of both Wall Street and Silicon Valley.
Securing America’s Critical Mineral Supply—And Investment Opportunity
The core logic driving Redwood’s growth is simple but transformative: nearly all minerals used in EV and consumer batteries are reusable. The process sidesteps mining’s environmental and geopolitical risks by harvesting resources already in circulation—a strategy Straubel believes could decouple U.S. supply chains from Chinese dominance.
- Redwood is the leading U.S. “miner” of cobalt through recycling, and is near the top in lithium and nickel as well.
- The company’s long-term objective is a circular economy: recycling, not mining, provides the lion’s share of battery minerals.
- This approach has particular importance as more EVs and batteries enter the market, opening a future where up to 99% of materials could be remanufactured again and again.
For investors, Redwood’s model offers a triple-edge: exposure to the growth of U.S. EV and stationary storage markets, insulation against raw material price shocks, and a bullish climate thesis as policy incentives for ‘made-in-America’ minerals accelerate.
Challenges: Access, Consumer Engagement, and Policy Gaps
Despite its impressive scale, Redwood Materials faces bottlenecks not just in technology, but in public awareness and logistics. While it’s easier for the company to obtain EV batteries (due to their size and traceable end-of-life), a vast proportion of smaller lithium-ion batteries from consumer electronics ends up in landfills, representing a lost economic and environmental opportunity.
Current U.S. policies lack strong frameworks for battery disposal and recycling, a gap Straubel has publicly highlighted. With most landfill fires caused by errant batteries, building an effective collection and recycling network is both a safety imperative and a financial upside.
Beyond Batteries: The Magnet Wars and Next-Gen Supply Chains
China’s dominance doesn’t stop at batteries. The country also controls high-performance rare earth magnets vital for cars, drones, consumer electronics, and military equipment. In response, U.S. companies like MP Materials—operator of the Mountain Pass mine in California—are expanding into magnet manufacturing and recycling, even securing a $500 million deal with Apple for 100% recycled-magnet production.[Apple]
Notably, the U.S. Department of Defense now holds a 15% stake in MP Materials, underlining the national security stake and the investment case for building a fully integrated domestic supply chain—from mining to refining, manufacturing, and recycling.
- Up to half of high-performance magnet material is lost as waste in the manufacturing process—if recaptured via recycling, this can radically slash costs and boost competitive advantage.
- MP Materials’ push for vertical integration mirrors Redwood’s vision for a cradle-to-cradle approach to materials.
Investor Implications: The Durable Moat in America’s New ‘Urban Mining’ Economy
Redwood Materials is quietly building a real economic moat: an unrivaled North American recycling network; advanced processing technology; and critical partnerships across tech, automotive, and defense. For investors, this signals an opportunity to back a business positioned at the crossroads of EV expansion, national security, and resource independence.
Market shares in recycling are still dwarfed by China’s dominance in mining and processing. Yet the vast untapped reserve of used batteries—driven by exploding EV and electronics adoption—means that ‘urban mining’ could be the single most important disruptor in the next decade of critical minerals supply chains. Expect Redwood’s story—and competitors chasing similar models—to be the next battleground for growth and geopolitics alike.[Fortune.com]
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