Redwood Materials, the battery recycling startup founded by former Tesla co-founder and CTO JB Straubel, has raised over $1 billion in a Series D round at a post-money valuation of over $5 billion, according to a source familiar with the matter. The raise brings Redwood’s total equity capital to $2 billion.

The company says it will use the funds to continue building capacity, expanding domestic battery supply chain, and allowing customers to buy battery materials — like lithium, nickel and cobalt — made in the U.S. for the first time.

Most battery materials are sourced or produced in China — a sticking point that has sparked a range of incentives in President Joe Biden’s Inflation Reduction Act to onshore the battery supply chain. China processes and refines 59% and 75% of the world’s lithium and cobalt, respectively, compared to 3% and 3.5% for Canada and the U.S. combined, according to data from Benchmark Minerals, a price reporting agency and specialist in lithium-ion batteries for the EV supply chain.To help address this gap and create a closed-loop supply chain in the U.S., Redwood is building out a couple of factories in the U.S. More near-term is Redwood’s 175-acre Sparks, Nevada recycling facility, which will produce anode copper foil. Coming up the pipeline is the company’s 600-acre facility in Charleston, South Carolina that will see Redwood go beyond recycling batteries and refining materials into remanufacturing of both the cathode and anode copper foil. Today, the U.S. usually exports several hundred thousand tons of copper a year to Asia, which is both environmentally unfriendly and leads to critical copper supplies leaving the U.S.

Redwood has said it expects to produce around 100 gigawatt-hours annual capacity of cathode active materials and anode foil, which can power 1 million EVs, by 2025. By 2030, the startup hopes to scale production output to 500 GWh per year, which could power 5 million EVs.

This latest round of capital will help Redwood get its copper foil production up and running by the end of 2023. Panasonic, which will supply Tesla’s Nevada gigafactory with batteries, will be Redwood’s first foil customer as part of an existing partnership. Redwood began recycling Panasonic’s manufacturing scrap from the Tesla gigafactory in 2019.Redwood’s Series D comes a few months after the U.S. Department of Energy approved a $2 billion conditional loan for the startup as part of the Advanced Technology Vehicle Manufacturing Loan Program. The milestone-based financing will be provided to Redwood in tranches to support its growth and the expansion of its headquarters in Nevada.

The round was co-led by Goldman Sachs Asset Management, Capricorn’s Technology Impact Fund, and funds and accounts advised by T. Rowe Price Associates. New investors, including OMERS, Microsoft Climate Innovation Fund and Deepwater Asset Management, also participated in the round.