Northvolt's recent bankruptcy has sent ripples through the cleantech industry, showcasing the risks associated with ambitious projects, especially in electric vehicle battery production. Despite significant backing, Northvolt struggled with operational challenges and mounting debts, ultimately leading to its downfall. In contrast, Redwood Materials, co-founded by Tesla's JB Straubel, is strategically focusing on cathode active materials (CAM), a vital yet underdeveloped segment of the battery supply chain, emphasizing partnerships and a less aggressive approach to scaling operations.
When Northvolt went bankrupt, it sent shockwaves through the cleantech industry. Backed by big names such as Goldman Sachs and BlackRock, the Swedish startup had set out to revolutionize electric vehicle battery production - not just recycling them, but making new ones, too.
Redwood Materials, by contrast, focuses on what it sees as the most valuable - and underinvested - piece of the EV battery supply chain: cathode active materials. CAM accounts for roughly 60% of a battery's value and 15% of the cost of an electric vehicle, according to Redwood.
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