Toyota and battery-recycling agency Redwood Supplies on Thursday introduced an growth of their earlier settlement that can see Toyota supply battery supplies from Redwood for future battery manufacturing.

Toyota introduced plans to work with Redwood on recycling of battery supplies in June 2022. But it surely’s now confirming plans to additionally supply recycled materials for battery manufacturing from Redwood, which earlier this yr obtained a $2 billion mortgage from the Division of Power to broaden its operations.

Whereas the comparatively small dimension of the present EV fleet means it is not a lot of a supply for recycled materials, Toyota anticipates a rising want for recycling as extra of its hybrids—such because the first-generation Prius launched greater than 20 years in the past—attain the tip of their lifecycles.

Toyota and Redwood Supplies battery recycling

Below the expanded settlement, Toyota will supply cathode lively materials and anode copper foil from Redwood. The recycling firm calls them “the 2 most important battery parts,” noting that whereas they account for almost all of the price of a battery cell, they’re at present manufactured totally abroad.

Redwood will quickly provide these supplies to the Toyota Battery Manufacturing North Carolina plant scheduled to open in 2025. Though these supplies may find yourself in hybrid batteries from this plant, Toyota’s greatest incentive, primarily based on Biden administration coverage and battery-materials sourcing guidelines for the federal EV tax credit score, is to make use of them in EV batteries.

Tax-credit guidelines now require battery uncooked supplies to be sourced domestically or from international locations with which the U.S. has a free commerce settlement, whereas present international coverage discourages importation of battery supplies from China. Supplies from Japan and South Korea could also be eligible proper now, but it surely’s unclear whether or not this loophole will stick. So a U.S.-based recycling scheme is a safer long-term wager.

Toyota and Redwood Supplies battery recycling

Redwood at present operates a facility in Nevada, and plans to interrupt floor on a second facility in South Carolina later this yr. Each will recycle and remanufacture battery supplies, with an final purpose of 100 gigawatt-hours of battery parts yearly.

The settlement between Redwood and Toyota requires 20% recycled nickel, 20% recycled lithium, and 50% recycled cobalt in cathode materials, and 100% recycled copper for the anode copper foil. Redwood claims this may make its battery supplies essentially the most sustainable on earth, however does not talk about value, which has develop into a limiting think about EV affordability.

Whether or not they’re newly produced or recycled, battery uncooked supplies will probably be key to automakers’ EV targets. Normal Motors in 2022 mentioned it had secured all battery uncooked supplies to provide a million EVs yearly by 2025—primarily via provide agreements reasonably than recycling.