Toyota (TM  ) recently announced it will collaborate with Redwood Materials (owned by the co-founder of Tesla (TSLA  )) with the ultimate goal of gathering and reusing car batteries. The primary objective is to recycle older car batteries through the process of breaking them down and making them into new ones.

This partnership between Toyota and Redwood will mainly hone in on the recycling of old batteries from Toyota's Prius model, which was released over 20 years ago. It will also focus on models such as the Lexus and other electric vehicles. Redwood Materials will likely start working on reusing and recycling batteries at Toyota's plant in North Carolina, as the two companies continue on with their partnership.

Together, both Toyota and Redwood Materials hope to combat steadily rising car battery costs, as well as a lack in the supply chain of metals and other materials. This issue is especially important to consider now that the usage of electric vehicles is becoming increasingly popular.

"We're going to be in a pretty chaotic period through the entire ramp up and transition of the fleet to electric, that's when we need the most materials -- from recycling, mining, all sources," co-founder of Tesla JB Straubel said in an interview.

More specifically, Redwood intends to develop plans and goals for coming up with materials for anodes and cathodes, which make up the majority of car battery cells. Ultimately Redwood would like to make a "closed-loop supply chain for electric vehicles," or to take batteries from electric vehicles and utilize them for newer vehicles. Redwood's goal is to produce the correct amount of anode and cathode parts for over one million electric vehicles by the year 2025.

"We're excited about this one," Straubel told Forbes. "It has a massive potential impact (for Redwood) when you look at the existing fleet of electrified Toyotas on the road. It's really big. And they are steadfast. They've had a few twists and turns in their path to electrification but I'm convinced that they're moving forward aggressively on this now and will continue to do so."