US policy charges EV battery race

 In Technology


The Inflation Reduction Act could supercharge the race to recycle electric vehicle batteries. Under the law, battery materials reclaimed in the U.S. can qualify automakers for EV production incentives. Factory building is now experiencing a boom since some of the minerals in the batteries — lithium, cobalt and nickel — can make them worth an average of $1,123 to $2,225 per car. While the materials could become scarce as EV production ramps up, they’re also capable of being recycled endless times without losing power.

  • China currently dominates the global EV battery recycling market, which is projected to grow to $18 million by 2028.


By Rob Sacks, Editor at LinkedIn News

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Dead EV batteries turn to gold with US incentives

POOLE, England, A little-publicized clause in the U.S. Inflation Reduction Act has companies scrambling to recycle electric vehicle batteries in North America, putting the region at the forefront of a global race to undermine China’s dominance of the field.

The IRA includes a clause that automatically qualifies EV battery materials recycled in the U.S. as American-made for subsidies, regardless of their origin. That is important because it qualifies automakers using U.S.-recycled battery materials for EV production incentives.

Reuters interviewed more than a dozen industry officials and experts who say that is kicking off a U.S. factory building boom, encouraging automakers to research more recyclable batteries, and could eventually make it harder for buyers in developing countries to buy old used EVs.

China handles virtually all EV battery recycling in a global market projected to grow from $11 billion in 2022 to $18 billion by 2028, according to research firm EMR. As more EVs are introduced and age out of the vehicle fleet, that business will grow.

The minerals in those batteries – primarily lithium, cobalt and nickel – are worth on average between 1,000 euros ($1,123) to 2,000 euros per car, BMW (BMWG.DE) sustainability chief Thomas Becker told Reuters.

Those materials could be in short supply within a few years as automakers boost EV production, but “can be recycled infinity times and not lose their power,” said Louie Diaz, vice president at Canadian battery recycling firm Li-Cycle (LICY.N), which received a $375 million U.S government loan for a New York plant slated to open later this year. That funding helped bring forward the investment decision for the plant, Diaz said.

JB Straubel, CEO of Redwood Materials, which was awarded a $2 billion U.S. government loan in February to build out a battery material recycling and remanufacturing complex in Nevada, said the IRA treats recycled battery materials as locally “urban mined,” or materials recovered from scrap rather than obtained from mining.

That has encouraged U.S. companies to move faster on recycling efforts than their counterparts in the European Union, which has focused instead on mandates, including minimum amounts of recycled materials in future EV batteries.

Recycling firms Ascend Elements, Li-Cycle and others are planning European plants in the next few years, but access to funding and the made-in-America incentive means several U.S. plants are already being built.

“What it (the IRA) does is change the demand equation for battery materials,” said Mike O’Kronley, CEO of Ascend Elements, which already has one recycling plant open in Georgia and has received nearly $500 million in Energy Department grants under the infrastructure law for a plant in Kentucky slated to open in late 2023. “We need to keep those valuable materials… so we can put them right back into EVs.”

The race is on to build “closed-loop supply chains” where recycled minerals are put into locally produced new batteries, said Christian Marston, chief technology officer at Altilium Metals, which is building a plant in Bulgaria and plans one in the UK by 2026.

“Everybody wants to control their own supply chain and nobody wants to be reliant on the Chinese,” he said.

However, China still leads the race, announcing tougher standards and increased research support for recyclers last month. After passage last year of the U.S. Inflation Reduction Act, Chinese officials described the legislation as “anti-globalization” and accused the U.S. of “unilateral bullying.”


Globally, there are at least 80 companies involved in EV recycling, with more than 50 startups attracting at least $2.7 billion, virtally all in the last six years, from corporate investors including automakers, battery makers and mining giants like Glencore (GLEN.L), according to data.

The volume of EV batteries available for recycling should grow over tenfold by 2030, said consultant Circular Energy Storage. Around 11.3 Gigawatt hours (GWh) of batteries reached end of life in 2022, and that should rise to 138 GWh by 2030 – equivalent to roughly 1.5 million EVs – CES said.

Electric vehicle batteries can last for 10 years or more.

Some industry officials anticipate rapid growth means 40% of battery materials used in new EVs could come from recycled stocks by 2040.

There is little existing U.S. recycling capacity today, and virtually none in Europe.

At a facility in Poole in southern England, car breaker Charles Trent Ltd has built two lines where workers deconstruct wrecked or old vehicles to recycle everything. It has built special containers for EV batteries, which are sold for research or used by retrofitters electrifying fossil-fuel cars, partly because there is nowhere to recycle them.

In Europe, EV batteries are currently shredded into “black mass” that is shipped to China for recycling.

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The race is on to squeeze the best price out of that black mass.

“The one who gets the highest yield at the lowest cost … will win this game,” said Bruno Thompson, CEO of Cambridge, England-based startup The Battery Recycling Company, which plans its first plant in 2024.

Dallas, Texas-based Ecobat, which shreds batteries in Europe and the U.S. for recycling elsewhere, has improved its recovery process so around 70% of battery-cell lithium is available for recycling, said chief commercial officer Thea Soule.

Eventually, Soule said, yields should reach levels close to 90% to 100%.

Getting better yields matters because the EU will mandate minimum amounts of recycled lithium, cobalt and nickel in EV batteries within eight years. The EU will also impose tough conditions on recycling outside Europe.

Those conditions will effectively keep recycling local, said Kurt Vandeputte, senior vice president at Belgian materials firm Umicore (UMI.BR).

There are also industry concerns about finding old EVs for recycling. Today, anywhere up to 30% of Europe’s old fossil-fuel cars disappear overseas – to new owners in developing countries or for scrap. Some automakers are trying to figure out how to keep tabs on those EVs.

Nissan (7201.T) has turned to leasing EVs in Japan to maintain control of batteries, while Chinese EV maker Nio (9866.HK) leases batteries to customers to retain ownership.

Keeping those minerals in Europe would cut off a cheaper source of transportation for developing countries.

BMW’s sustainability chief Becker said the value of battery materials will hopefully make recycling more attractive than selling vehicles abroad, but Europe must focus on ensuring those EV batteries do not slip away.

“We’ve got to make sure we lose nothing,” Becker said.

($1 = 0.8902 euros)

Reporting By Nick Carey in Poole, England, Paul Lienert in Detroit and Victoria Waldersee in Berlin, editing by Ben Klayman and Claudia Parsons
By Nick CareyPaul Lienert and Victoria Waldersee, Reuters

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