Auto pioneer Ford (NYSE:F) s partnering with battery recycling start-up Redwood Materials to reuse the raw materials from EV battery packs.
The agreement, which will begin initially with recycling scrap material from battery manufacturing, is the latest indication automakers are taking steps to address the supply and cost of raw materials needed to manufacture batteries for electric vehicles.
"It will help us reduce the reliance on importing a lot of the materials that we use today when we build the batteries, and then it’ll reduce the mining of raw materials, which is going to be incredibly important in the future as we start to scale," said Lisa Drake, Ford’s chief operating officer.
"Creating this domestic supply chain is really a major step towards making electric vehicles more affordable and more accessible to everyone."
With EV sales in the U.S. expected to jump from an estimated 350,000 autos in 2021 to more than a million annually by 2025, according to the research firm LMC Automotive, automakers are increasingly focused on the life cycle of EV batteries.
Ford’s deal with Redwood Materials could benefit both companies as the number of EVs continues to grow. Ford and its battery manufacturing partner SK Innovations will secure a steady, and potentially growing, supply of key materials such as lithium, nickel and copper critical to manufacturing EV battery packs.
Redwood Materials will receive battery packs that will be recycled, with the key elements then shipped back to Ford to be reused in future EVs.
F shares tacked on 27 cents, or 2.1%, to $13.04.
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