Redwood Materials, the battery recycling company founded by a former Tesla executive, today announced it is building a massive $3.5 billion facility in South Carolina.

The 600-acre plant, which will be located just outside Charleston “in the heart of the Battery Belt,” will employ about 1,500 people over 10 years and produce 100 GWh of cathode and anode components annually, Redwood said. The new plant will be built in the first quarter of 2023, with a view to starting the first recycling process by the end of the year.

Those components are not currently manufactured in North America, forcing automakers to source most of the materials needed for electric vehicle batteries from abroad. That has resulted in a 50,000-mile supply chain by 2030 at a cost of $150 billion, the company notes.

Redwood claims that by recycling EV batteries domestically, it can help reduce emissions and reduce global insecurity, with a view to reuse and recovery. The company says its operations “will be 100 percent electric and we won’t use fossil fuels in our processes (we won’t even pull a gas line to the site).”

Redwood also claims it can reduce CO2 emissions from EV battery materials by “approximately 80% compared to the current Asian supply chain we depend on for these critical materials.”

Redwood chose South Carolina after the state approved at least $225 million in taxpayer-funded debt for the company in what was likely the largest economic development deal in the history of the state.

Redwood Materials was founded in 2017 by Jeffrey “JB” Straubel, a former Tesla chief technology officer. In addition to breaking down scrap from Tesla’s battery manufacturing process with Panasonic, Redwood also recycles EV batteries from Ford, Toyota, Nissanspecialized, AmazonLyft and others.

Many of the batteries in those first-wave electric vehicles, such as the Nissan Leaf, are now reaching their end of life and need to be recycled. After receiving batteries from its various partners, Redwood begins a chemical recycling process, removing and refining the relevant elements such as nickel, cobalt and copper. A certain percentage of that refined material can then be re-integrated into the battery manufacturing process.

Redwood’s new plant is the latest in a series of new facilities, many of which are located in the Midwest and South. Localizing battery production in the US is important for automakers to qualify for the $7,500 tax credit per vehicle, which requires EVs to be assembled in the US. Foreign automakers have expressed concern that the new tax credits could discriminate against companies without US manufacturing facilities, but they have also begun taking steps to localize production in the US.

Ford has said its three new battery plants will enable 129 GWh of production capacity per year. General Motors and LG Chem are planning four new battery plants in the US for a total annual capacity of 140 GWh, while Volkswagen aims to have six battery cell production plants in Europe by 2030 for a total of 240 GWh per year. Stellantis is planning a new plant in Indiana, which will have an initial annual production capacity of 23 GWh. BMW, Hyundai and Honda have also announced US factory plans.

Global battery production is expected to grow from 95.3 GWh in 2020 to 410.5 GWh in 2024, according to GlobalData, a data and analytics company. But Raw material prices are also risingwhich could complicate the transition to electric vehicles.