Redwood Materials Is Cutting 10% of Its Workforce — Battery Recycling's Boom Is Over
Redwood Materials, the battery recycling company founded by Tesla co-founder JB Straubel, is cutting 10% of its workforce. The EV materials supply chain has hit its first major wall — and Redwood is the clearest signal yet that the battery recycling boom was priced on assumptions that aren't holding.
What's Behind the Layoffs
Redwood built its business on two assumptions: EV adoption would create a massive wave of end-of-life batteries for recycling, and automakers would pay a premium for domestically sourced recycled materials. Both assumptions have hit resistance. EV adoption growth has slowed below projections, meaning fewer old batteries entering the recycling stream now. Automakers under margin pressure are squeezing suppliers harder.
The company raised billions at peak EV hype, scaled aggressively, and is now recalibrating to a more realistic timeline.
The Wider EV Infrastructure Reality Check
Redwood is not alone. The EV materials sector over-invested on the premise that the energy transition would be faster and more linear than it's proving to be. Infrastructure buildouts across energy and technology are systematically running behind schedule — the companies most exposed to near-term volume projections are now correcting.
My Take
Battery recycling is still a real business with a real future — the transition is happening, just slower than the narrative suggested. JB Straubel is a credible operator and Redwood has the right technology. But the hype cycle built valuations that assumed hockey-stick growth, and those assumptions are being corrected now. A 10% cut is painful but rational — it's better than running out of runway maintaining headcount for a market that hasn't arrived yet.
Frequently Asked Questions
What does Redwood Materials do?
Redwood recycles lithium-ion batteries from EVs and consumer electronics, recovering materials like lithium, cobalt, and nickel for new battery manufacturing.
Why is Redwood Materials cutting staff?
Slower-than-expected EV adoption has reduced near-term battery recycling volumes, and tighter auto industry economics are compressing supplier margins.
Who founded Redwood Materials?
JB Straubel, who served as Tesla's Chief Technical Officer from the company's early days through 2019.