Battery Startup Redwood Materials Tops $6 Billion Valuation

Bloomberg

Watch Battery Startup Redwood Materials Tops $6 Billion Valuation - Bloomberg on Dailymotion

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00:00Why RAISE? What's the money going to be used for?

00:03Well, thanks for having me.

00:04And the primary purpose for this particular Series E RAISE

00:08is actually to accelerate our grid energy storage business.

00:13So many people think of us as a battery recycler only,

00:16but on top of that platform,

00:18we've built a growing energy storage business

00:21that is really quite exciting.

00:25JB, I'm recognizing that there's a pivot here

00:29for Redwood, right?

00:31And the question that we get a lot for you

00:34is what is the viability of that legacy recycling business

00:38under the Trump administration

00:39and the policy environment we're in?

00:42Could you explain that based on the emphasis

00:44you're putting on this next-gen energy demand

00:47from data centers?

00:49Yeah, well, I guess the first thing I'd highlight

00:52is there are no federal incentives.

00:54There's no sort of infrastructure

00:56for the federal government

00:58to support battery recycling.

01:00There never has been.

01:02So what we do and others do

01:04is purely driven by economics

01:06and being competitive today with mined materials.

01:10And in this current Trump administration, actually,

01:14we've seen huge excitement

01:16around the critical materials nature

01:18of what we're working on

01:20because, you know, very directly,

01:22we're a quite substantial source

01:24of cobalt, nickel, and lithium, and copper,

01:27you know, all of which is domestically sourced.

01:30It's already here.

01:31It's already secure.

01:32So from that point of view,

01:33I actually am perhaps even more excited

01:36about the core recycling business

01:37in this administration

01:38than I have been in the past.

01:40Well, JB, just real quick,

01:41I was of the understanding

01:42the IRA did provide for incentives for recycling.

01:47Am I wrong about that?

01:50No, the IRA provides, you know,

01:52incentives for some of the material manufacturing

01:55that sort of evolves further downstream

01:57from recycling.

01:59I see.

01:59So if you were to make it,

02:00so that's more of the manufacturing side.

02:03But in terms of collection, refining,

02:05and selling those materials back,

02:07there's no incentives,

02:08there's no particular premiums for that material.

02:11And boy, in this moment of electrification,

02:14in this moment of need for compute and data centers,

02:16do we need a lot of those materials

02:18that you talk about?

02:20And with rare earth metals being a concern too,

02:22I'm interested in just who you then get strategically

02:25on the cap table to drive that forward, JB.

02:27Why NVIDIA, for example?

02:28Interesting that they're coming on.

02:31Well, NVIDIA's interest is clearly evolving

02:33from our energy storage business.

02:35And, you know, what we're doing

02:36is taking old transportation battery packs,

02:39refurbishing them, and then redeploying them,

02:42extending their life in a very low cost setting

02:44to provide these energy storage services

02:47for data centers, for AI factories,

02:49and for the expansion of industrial grid electrification.

02:54And this is one of the cheapest ways

02:56to provide grid energy storage.

02:58It's far cheaper than deploying brand new batteries,

03:01and it can be a complementary strategy

03:03alongside of our materials recycling.

03:07So this is really what's driven NVIDIA's excitement.

03:09I think they see that energy access

03:12and electricity availability

03:13has become a key strategic point

03:17for AI factory expansion.

03:19Can we talk about the money, therefore,

03:22that you need coming in?

03:23You've raised this equity,

03:24but you're also depending on money

03:26coming from a federal perspective,

03:28a $2 billion loan from the Department of Energy.

03:30How is that in status?

03:31How are you seeing that navigation

03:33when it looks as though the current administration

03:34wants, well, equity for every time

03:36that they're giving some sort of federal funding?

03:38Well, everything we're doing

03:41is supported by private funding.

03:43That's something we're pretty proud of,

03:45and this round continues that focus.

03:49The government obviously has taken a different approach

03:52in looking at the DOE loan program,

03:54and there's a huge amount of interest

03:56in a lot of these projects.

03:58But I'd say from our point of view,

04:01we're focused on critical materials and energy storage

04:05and looking at the applicability of that

04:07for those interests.

04:10JB, you are on Tesla's board.

04:12You recused yourself from the special committee on comp.

04:15I know that.

04:17Elon's argument is he needs voting control of Tesla.

04:20Explain that to me as if I were a five-year-old, please.

04:23The basics of why the board's position

04:25is that Elon should have voting control.

04:27Well, I can't say too much more about Tesla matters today,

04:33but maybe I would just comment that the focus

04:36is really on providing shareholder value,

04:40and that's really the sort of first and foremost direction

04:43that we look at these things from.

04:45So I think this proposal really does that,

04:48and it provides potential incredible upside growth

04:51to the existing and future shareholders.

04:53And lastly, JB, you're aware of the Bloomberg reporting

04:57about the manual release mechanism in Tesla car doors.

05:01From the board's perspective,

05:03are you aware of any action Tesla's taking

05:05to change the design of that mechanism,

05:07or has it been discussed at the board level?

05:11Well, again, I can't go too deep on these topics,

05:14especially if there's any ongoing legal proceedings,

05:17but we take any safety matters incredibly seriously.

05:20You know, this is, you know, one of the most important issues,

05:24and we're constantly watching that.

05:26We're constantly looking at, you know,

05:28new events and reports,

05:29and, you know, we'll stay, you know,

05:32closely aware of any actions going on there.

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