Last month, four lithium-ion battery recyclers received a total of US$255 million in investment, and another completed the merger.
Driven by the explosive growth of the electric vehicle manufacturing industry, the lithium-ion battery industry is facing a substantial increase in demand. In the United States, only 1% of electric vehicle battery raw materials and component materials are currently produced, and recyclers believe they can meet this moment.
In just one week in September, four battery recyclers operating in the United States announced that they had jointly raised more than $255 million in new funds to expand their businesses. American Battery Technology Corporation raised $39.1 million to support a new plant in Nevada. Redwood Materials announced that Ford has invested $50 million to integrate battery recycling into the automaker's supply chain. Li-Cycle received a $100 million investment from Koch Strategic Platforms to build new recycling centers in North America and elsewhere. Battery Resourcers raised $70 million in funding to expand their business to Europe.
The money comes at a time when automakers and battery manufacturers are preparing to fulfill their promises-driven by state and federal requirements-to substantially expand the production of electric vehicles in the next ten years.
Matty Stanislaus, interim director of the Global Battery Alliance, said that global recycling needs to increase its existing capacity by 25 times to meet the demand for lithium-ion battery materials. Capturing batteries taken from aging and defective electric vehicles helps meet this capacity.
"The mass production of electric vehicles continues," said Stanislaus, a former assistant administrator of the U.S. Environmental Protection Agency. "We have a rare opportunity to really plan for this."
Recyclers of used batteries say they can now implement systems to capture minerals such as lithium, cobalt and nickel needed for manufacturing and reintroduce them into the supply chain. Obviously, the industry is ready for growth: According to Benchmark Mineral Intelligence, from April to September this year, the total amount of recyclable lithium-ion batteries in North America is expected to increase by 65% by 2025.
Experts from Benchmark and elsewhere predict that starting from 2025, 398,000 tons of batteries in electric vehicle applications will begin to age and need to be reused, recycled or otherwise discarded-four times the number of aging batteries in 2018. Recyclers are now racing to increase capacity before the wave starts to peak.
American Battery Technology Corporation (ABTC) is one such recycler that increases production capacity. The company focuses on disassembling used batteries in an effective recycling process, and has received funding from industry giants such as BASF and government agencies such as the U.S. Department of Energy (DOE).
Chief Executive Ryan Melsert (Ryan Melsert) said that the difference between the mining and refining of key minerals in the United States and battery and automobile manufacturing capabilities may get worse before it improves. As these industries moved abroad, the country’s mining and refining industrial base has become poor. In contrast, large automakers such as Ford and General Motors continue to attract talent and are able to actively enter the electric vehicle market.
"We have some of the best automotive manufacturing engineers in the world and a large number of battery manufacturers," Melsett said. "But in terms of mining and material processing, the United States has only outsourced a lot of work in the past few decades."
This may change soon. Among the bipartisan infrastructure bills passed by Congress, a recent draft includes more than $6 billion in new funding for battery manufacturing. These funds are mainly focused on the development of key mineral procurement, and Merset said it needs to be promoted.
About half of the funds can be used for recycling, which is a huge injection into emerging industries.
Wilson Ma, vice president of corporate development at Li-Cycle, said that the Canadian-based recycler was able to enter the recycling market in early 2016, partly because of the recycling of waste being produced by the rapidly expanding battery manufacturing division. This stable source of materials allows Li-Cycle to expand and prepare for today's new source of raw materials.
"A lot of people really think this will become a problem in 10 years, that is, at the end of the true life of the vehicle," Ma said. "In fact, what we have learned so far is not just to provide us with recycled batteries. In fact, the manufacturer's waste generated by these battery production plants can also generate a large amount of output."
Li-Cycle currently processes 10,000 metric tons of lithium-ion batteries in North America and plans to add another 20,000 metric tons of U.S. production capacity by mid-2022.
Ma said that the battery recycling industry in North America is in a "pretty early stage," but he was encouraged by the government's interest in supporting recyclers.
Several recycling managers said that if the infrastructure clause is passed as outlined, they will certainly seriously consider obtaining some additional funds. But no one will wait for Congress to act before planning aggressive expansion.
"Domestic demand has grown tremendously during periods of metal shortages, not to mention materials with low environmental impact," Melsett said. "Our biggest obstacle now is that we are expanding the scale as soon as possible."
The industry is familiar with the closed-loop system for battery recycling—now, 99% of lead-acid batteries in the United States are recycled. However, according to the US Department of Energy, only about 5% of lithium-ion batteries are currently recycled.
Stanislaus said that a relatively closed cycle was achieved only after manufacturers realized that the need for sustainable lead sources exceeded the need to create proprietary battery structures.
"In the early days... it hindered the recycling market because all these unique designs made it costly and difficult to recycle lead," he said. "So I think this is a good learning opportunity to see the benefits of a common approach."
The Global Battery Alliance includes battery manufacturers and public entities, and Stanislaus and others are optimistic that the industry can work hard to develop some common standards to promote reuse or recycling.
Battery manufacturers driven by ESG goals or resource scarcity have realized the intrinsic value of recycling minerals used in lithium-ion batteries. In particular, the unpredictable production of key minerals has caused people to repeatedly worry about the shortage of the elements most needed to produce lithium-ion batteries.
Initially, manufacturers were most worried about the shortage of lithium. Early reports indicate that there may not be enough reserves to meet demand, although studies in the past few years have found that by at least 2050, the world's lithium reserves may be sufficient to meet the demand for electric vehicle batteries.
Cobalt also remains a problem. The US Geological Survey reported that 70% of global cobalt supply in 2019 came from the Democratic Republic of Congo, despite widespread reports of child labor in the country's mining industry. These concerns have led manufacturers to change their battery chemistry in some cases to include more nickel instead of cobalt.
But just last week, a report from Rystad Energy also found that nickel could be in shortage as early as 2026. The report may lead to another shift, this time to iron phosphate-based lithium batteries, industry leaders said.
Manufacturers did not address the geopolitical uncertainties and ethical issues caused by these mining minerals, but used recycling as a means to provide certainty and enhanced capabilities for lithium-ion battery manufacturing.
Stanislaus said that the explosive growth of electric vehicles and lithium-ion batteries is different from other industries (such as IT) that have grown in recent years. Unlike purely market-driven innovation, public policy’s focus on decarbonization in the transportation sector creates a high-pressure environment where electric vehicles can be delivered on a fast schedule.
Therefore, since its establishment through the World Economic Forum in 2017, the Global Battery Alliance, in which Stanislaus has been involved, has convened a working group including public and private partners to design batteries that can be recycled or reused. Easy, rather than turning into waste.
"I think all the money entering the market means that a [recycling] company will be experimenting," Stanislaus said. "It's all good, but unless they converge in at least some general method that matches the batteries made today, there will be deviations."
The electric vehicle boom in the next decade is expected to bring a revolution to the lithium-ion battery industry, but in the past two decades, this chemical substance has been widely used in more niche applications. Current recycling industry participants have found creative ways to establish their market position.
Li-Cycle established the largest lithium-ion battery recycling plant in Rochester, New York, and opened this year, thus taking the lead in the industry. Ma said that some battery manufacturers are currently producing waste at a rate as high as 30% of total output, relying on waste to provide a large amount of raw materials for the company's active facilities.
He expects that as technology and processes improve, this number will drop to 5%. However, even if the scrap rate declines, the absolute number of battery manufacturing will be online by 2025 alone-according to the U.S. Department of Energy, almost four times the current production capacity-meaning that the lithium-ion battery industry will obtain stable profits in manufacturing Recycle waste on site.
Shane Thompson, president of Retriev Technologies, said that he has participated in conferences on lithium-ion batteries for more than 20 years. His company has opened up a versatile niche market for itself, absorbing smaller lithium-ion batteries from consumer electronics and using lead-acid batteries and other types of batteries in the smelting process.
Thompson said that electric vehicle batteries pose a unique set of challenges: First, the battery pack itself was so large that Retriev had to expand its equipment at a factory in British Columbia to handle waste.
But his company recently merged with The Heritage Group and Kinsbursky Brothers International, and is investing heavily in technologies that can test battery capacity before the battery is damaged, possibly opening them up for energy grid capacity or other applications.
"The limiting factor of renewable energy is the intermittent nature of its production. So if you can combine it with affordable energy storage options, you can diversify now. It makes renewable energy more attractive, "Thompson said.
When the lithium-ion battery loses only about a quarter of its capacity, the lithium-ion battery will be taken out of the electric vehicle. This leaves a lot of useful energy in the battery, which recyclers believe they can and should use for other purposes.
Many recyclers are now actively working with car manufacturers to convert their lithium-ion batteries into a more recyclable and reusable form. This is a radical change in the way the industry operates, especially when compared to the old lead-acid batteries, and it is also a positive sign of a new waste disposal method.
“In the past, discussions about recycling were only held in the office of the environment and sustainability staff, but now a bit shifted to the supply chain and procurement office. So where did our materials go? How do we get back any of our materials?" Thompson said. "I think this is an important point."
Since the beginning of 2020, more than half of the 10 largest cities in the United States have new public works, sanitation or solid waste supervisors. During the pandemic and changes in technology and public participation trends, positions have changed.
Last month, four lithium-ion battery recyclers received a total of US$255 million in investment, and another completed the merger. With the aging of existing electric vehicle batteries and the launch of new vehicles, demand is growing rapidly.
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Since the beginning of 2020, more than half of the 10 largest cities in the United States have new public works, sanitation or solid waste supervisors. During the pandemic and changes in technology and public participation trends, positions have changed.
Last month, four lithium-ion battery recyclers received a total of US$255 million in investment, and another completed the merger. With the aging of existing electric vehicle batteries and the launch of new vehicles, demand is growing rapidly.
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