Tesla CTO JB Straubel has a stealthy recycling start-up and it's expanding into Nevada

  • Tesla CTO JB Straubel established a recycling startup, Redwood Materials, in 2017.
  • Now, it's registered to do business in Nevada.
  • Straubel has promoted recycling in Tesla's own business, saying the company would eventually like to establish a "closed loop."
JB Straubel, Tesla Motors chief technical officer.
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JB Straubel, Tesla Motors chief technical officer.

Elon Musk isn't the only Tesla executive with a start-up on the side.

Tesla CTO Jeffrey B. Straubel, known as JB, recently registered Redwood Materials -- his stealthy recycling venture -- to do business in the state of Nevada, CNBC has learned from a filing.

Redwood Materials' chief financial officer, Andrew Stevenson, also posted a job opening for a mechanical engineer to work at the recycling venture in Northern Nevada a week ago on LinkedIn. Stevenson worked at Tesla for about 3 years until June, in a special projects office of the CTO.

At Tesla, Straubel spends most of his time at the Gigafactory 1 in Sparks, Nevada, which churns out batteries for electric vehicles and solar energy systems. He has overseen battery tech, but also power electronics, motors, software, firmware and controls, among other responsibilities at Tesla.

Redwood Materials was established in Redwood City, California, in 2017, near Tesla's headquarters in Palo Alto. However, the company is not working with Tesla, Straubel told CNBC in an email.

"Redwood is not currently doing any business with Tesla and our expansion to Nevada is unrelated to Tesla or to the Gigafactory directly," said Straubel. "Northern Nevada has a welcoming business environment, a growing technology presence and gives us a strong foundation for aggressive future growth.

Tesla's Gigafactory and its main auto plant in Fremont, California, typically generate large amounts of scrap, cardboard and waste from construction, according to multiple former employees. In late June, a fire broke out at Tesla's Fremont factory, where cardboard was being prepared to go off to a recycling center.

At an annual shareholder's meeting for Tesla in June, Straubel answered a question from a Twitter user about the company's approach to battery waste. He said:

Tesla will absolutely recycle, and we do recycle, all of our spent cells, modules and battery packs. So the discussion about is this waste ending up in landfills is not correct. We would not do that, these are valuable materials. In addition, it's just the right thing to do.

We have current partner companies-- on every major continent where we have cars operating-- that we work with to do this today. And in addition, we're developing internally more processes, and we're doing R&D on how we can improve this recycling process to get more of the active materials back. Ultimately what we want is a closed loop, right, at the Gigafactories that reuses the same, recycled materials.

Straubel has also repeatedly spoken about recycling minerals, which are used in electric vehicle batteries and motors, and can be both costly and subject to shifting tariffs.