Volkswagen is in the midst of a huge electrification effort, spurred on by a combination of dieselgate and stringent fleet emissions targets in Europe. Last week, the company broke ground on the first of six European battery factories and is actively looking at building one or more similar plants here in the US. If and when that happens, Volkswagen may well make those batteries using material recycled from older electric vehicle batteries, thanks to a new collaboration with Redwood Materials.

"Redwood Materials is a great partner to help us accelerate EV adoption in America. This collaboration allows us to move closer toward our goal of closing the loop for a circular EV economy, giving American consumers yet another reason to go electric," said Scott Keogh, president and CEO of VW Group of America.

As we explored yesterday, the lithium-ion battery in an electric vehicle should see little loss of storage capacity over the course of a decade. But eventually, batteries will degrade to the point where it makes more sense to repurpose them as static storage (once they can only hold 60–70 percent of their original charge) or eventually recycle them.

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Although the battery-recycling industry is in its infancy, Redwood Materials has emerged as one of its leading players. Founded by former Tesla executive JB Straubel and funded by Amazon, the startup is already recycling around 6 GWh of lithium-ion cells—the equivalent of at least 60,000 EVs—each year at its factory in Nevada.

Many of those batteries are from consumer electronics, but Redwood also recycles material from Panasonic's cell production at Tesla's Nevada factory. And in February, Ford and Volvo became Redwood's first partners in an EV battery-recycling program.

VW's collaboration with Redwood looks like it will work the same way as the Ford and Volvo agreement. VW Group of America will use the company's network of VW and Audi dealerships to identify end-of-life batteries and materials, which they'll package and send to Redwood's facility in Nevada for recycling.

"The transition to electric transportation and clean energy is coming, and the batteries powering these technologies present an incredible opportunity. As more and more batteries reach end-of-life each year, an increasing and infinitely recyclable resource becomes available," said JB Straubel, Redwood Materials founder and CEO. "Redwood and Volkswagen Group of America share a vision to create a domestic, circular supply chain for batteries that will help improve the environmental footprint of lithium-ion batteries, decrease cost and, in turn, increase access and adoption of electric vehicles."