Millions of old Toyota Prius hybrids will be recycled for new EV batteries, thanks to a startup run by Tesla cofounder JB Straubel

• Redwood Materials and Toyota announced a major new deal on Thursday.
• The agreement will mean Redwood can recycle batteries from millions of old Prius hybrids.

If there was any doubt about Toyota's commitment to electric vehicles, a new deal announced on Thursday should clear things up.

Redwood Materials, a battery recycling startup run by Tesla cofounder JB Straubel, unveiled a big new agreement with Toyota.

The companies expanded an existing pact so Redwood can recycle batteries from older Toyota vehicles. The Japanese auto giant will also source Cathode Active Material and Anode copper foil from Redwood for Toyota's new batteries that will go into future EVs.

About 20 years ago, the Toyota Prius hybrid took the automotive world by storm. Many of these vehicles will be reaching the end of their useful lives soon. Thursday's new deal will mean Redwood can take the old batteries from these hybrid engines and recycle the materials.

Then, some of that valuable salvaged material will end up in EV batteries that Toyota plans to make in a new $14 billion factory in North Carolina that is slated to open in 2025.

In all, Toyota expects to recycle, remanufacture and repurpose almost 5 million units. That's a lot of Priuses. Many of these aging hybrid vehicles happen to be in California, not too far from Redwood Materials' main facility in Nevada.

Redwood Materials wouldn't say how much this Toyota deal is worth. However, a similar agreement with Panasonic in late 2022 was worth billions of dollars.

Several traditional auto companies have scaled back their EV ambitions lately. Toyota has resisted going all-in on electrification in recent years. And in late 2022, a top Toyota executive said most of the auto industry didn't think EVs were the only way forward.

Despite this, Thursday's agreement with Redwood Materials suggests that Toyota is actually pretty committed to EVs.