- As US incentives push for more electric cars, recyclers will face a “mountain” of battery waste.
- Most battery recycling companies in the US are still in the early stages of development.
- From transporting heavy batteries to recovering metals, the industry faces several hurdles.
- See more stories on Insider’s business page.
The drive to sell more electric cars will create a massive amount of waste, and along with it a lucrative new opportunity for those who know what to do with it.
As massive factories — dubbed gigafactories by Tesla CEO Elon Musk — race to pump out lithium-ion batteries to support a widespread shift to electric vehicles, they’re seeding the ground both for a huge waste problem and a supply chain crisis.
The electric cars on the road today will contribute to 15 million tons of global battery waste when they reach the end of their life — within seven to 10 years of production — according to data from Li-Cycle.
“We’re going to see an astronomical increase, literally mountains of gigafactories worth of battery waste,” Dan Kish, a senior fellow at the the Institute for Energy Research told Insider.
Li-Cycle
What’s more, in order to meet future electric vehicle production goals set out in the Biden Administration’s $2 trillion climate plan, manufacturers will need more lithium, nickel, and cobalt than mining companies are currently prepared to extract.
But here, two problems can make a solution: Recycling used EV batteries can reduce the waste problem and put battery components back into the supply chain.
These start-ups are poised to benefit from a multi-billion dollar opportunity: Within the next four years alone, the global battery recycling market is expected to grow from a $17 billion industry to over $23 billion, largely due to waste from electric cars, according to a report from ResearchandMarkets.com.
The emerging industry faces several hurdles
Despite projections, the battery recycling industry faces several challenges, and many start-ups are still in the beginning stages of developing their technology.
Battery recycling can be time consuming and expensive. From finding ways to transport the bulky batteries — which weigh over 1,000 pounds — to actually disassembling the batteries, Kish said he questions whether the recycled metals will be able to compete with mined elements. “At this point, the cost of recycling is so high there’s not enough companies out there to deal with the amount of waste we have coming down the pipeline,” he told Insider.
Many traditional recycling processes require disassembling the batteries by hand, a process that can be incredibly time consuming and take over 20 minutes per EV battery, as the energy packs made for electric vehicles have thousands of cells. That might not sound like a long time, but when faced with 15 million tons of batteries, it’s not sustainable, according to Kish.
Recycling processes also impact how much of the battery goes to waste. Whether burning the batteries down to a sludge or shredding them, it can be difficult to recover and separate different battery-grade materials.
Fortunately, some of the top minds in the EV business are already working on cracking those challenges. From the man behind Tesla’s lithium-ion battery powertrain to environmental scientists and lithium mining experts, here are some of the key players in North America looking to close the gap between electric cars and their waste.
Li-Cycle was one of the first startups in North America to focus on lithium-ion battery recycling
Li-Cycle
Li-cycle CEO Ajay Kochhar told Insider that when he worked as a director at a lithium chemical processing company, he saw a glaring hole.
“Back then, there was nowhere near the amount of battery manufacturing plants as there is today,” Kochhar said. “And it still became readily apparent to me: What was going to happen to all of those batteries?”
Kochhar cofounded Li-cycle in 2016 with his coworker, Tim Johnston. The company has since become one of the most advanced lithium recyclers in North America, and in February announced plans to go public via a
SPAC
in a deal that valued it at $1.67 billion.
Kochhar said the company’s early success can be attributed to its efforts to address the key hurdles to EV battery recycling: transportation, cost, and time.
To address transportation issues, Li-Cycle created a sort of spoke and hub model, positioning two facilities near its 40 partnering automakers and battery manufacturers. There, the batteries are broken down and shredded. The remains are sent to Li-Cycle’s hub in Rochester, New York, where they’re converted back into battery grade elements — a powdery substance.
Li-Cycle
While most companies break down the batteries by hand to some extent before shredding or burning them, Li-Cycle has developed a process that can shred a car-size battery in one go.
Li-cycle is one of few companies that has already begun to reintroduce the recycled material back into the supply chain via its pilot hub plant.
The company plans to recycle about 20,000 metric tons of batteries a year by 2025 — equivalent to discards from about 60,000 electric vehicles.
J.B. Straubel left Tesla to address the issue of battery recycling
Redwood Materials
Former Tesla executive J.B. Straubel, the mind behind the automaker’s lithium-ion battery powertrain, sees recycling as a way to make electric cars cheaper.
Straubel established Redwood Materials in 2017 to find solutions for discarded batteries. Redwood has two facilities in Carson City, Nevada, near Tesla’s gigafactory, where the startup has a trial with Tesla’s Japanese partner, Panasonic Corp.
The startup also got in on Amazon’s $2 billion Climate Pledge Fund, recycling consumer electronics for the e-commerce giant. To date the company has over $200 million in funding, according to data from PitchBook.
“This is the time to start inventing technology,” Straubel told Insider in a March interview with Insider’s Matthew DeBord. “We’re not yet overwhelmed by a tsunami of waste EV batteries. We’re a few years ahead of it, and that’s a good place for us. This is something I feel is an incredibly important problem, and I’m excited to create the change.”
Li-Cycle
Redwood uses a similar shredding process to Li-Cycle. The CEO said he believes that in the future, recycled materials could become more important than mined ones — accounting for 90% of a battery’s components.
While most of the materials Redwood recycles come from consumer electronics, the company also recycled enough scrap from Panasonic in 2020 to power over 10,000 electric cars, according to The Wall Street Journal. In January, the company even began accepting old electronics from the general public.
Lithion plans to be commercially operational by 2024
Lithion
Jean-Christophe Lambert, the business development manager at Lithion, told Insider one of the company’s biggest struggles at the moment is finding EVs to recycle.
The Canada-based company announced a partnership with Hyundai to recycle battery scrap from the company’s manufacturing plants in February. Companies like Lithion and Li-cycle say most of their recycling materials come from manufacturing scrap — battery pieces or entire batteries that didn’t pass muster and never made it into a car.
Lambert said the company is primarily working to put itself in a position where its technology and processes are ready to recycle at scale when the glut of electric cars begin to reach their end of life stage in the next 5-10 years.
“There’s not a lot of companies in the market right now,” Lambert told Insider. “It’s going to get competitive at some point, but the companies that were here first are going to have a distinct advantage.”
As companies like Lithion and Li-cycle prepare for the onslaught of EV batteries, they are also preparing to meet a need on the supply side for automotive manufacturers as dwindling lithium, cobalt, and nickel supplies could hamper the supply chain, Lambert said. While Lithion has not yet reached a stage where it is returning the elements to manufacturers via a closed loop process, the recycled elements will fill this gap in the supply chain and will likely be even cheaper than mined elements.
Recell is a project funded by the US Department of Energy
Recell
There are several ways to recycle a lithium-ion battery, including using pyro techniques to burn the battery down to a sludge and the shredding process used by Li-cycle and Lithion. While thermal techniques are more traditional, they come at an environmental cost.
Jeff Spangenberger, the director of Recell Center, told Insider the organization is working to create an economically viable recycling process without a carbon footprint.
Recell is working on a direct-recycling process that jumps several steps and could make the work cheaper, Spangenberger told Insider. The company is also looking for ways that automakers can build batteries that are easier to recycle, without tough glues and compact modules.
While the 2-year-old organization is still 6-8 years out from a commercial roll-out, Spangenberger said EV battery recycling is something that the US government should be prioritizing now.
“We need to get to a point where people recognize lithium-ion batteries as valuable,” Spangenberger told Insider. “We need to start building up this recycling infrastructure now, not just when existing recycling companies start making money further down the road.”
