Electric Car Battery Recycling: Benefits, Methods and Challenges

The number of electric vehicles on the road will increase exponentially in just a few years. By 2030, a little over half of all new passenger cars sold in the U.S. will be electric vehicles, according to Bloomberg. But what happens when the battery packs that power EVs reach the end of their life? While potential buyers may have concerns that packs will end up in landfills, that won't necessarily be the case thanks in part to battery recycling. Although still in its infancy, EV battery recycling is growing quickly, especially since automotive manufacturers are collaborating with recycling companies.

EV battery packs aren't viable for vehicle use after they lose 70% to 80% of their original capacity, which can take quite a while. For example, in Tesla's 2022 Impact Report, the automaker claims that Model S and Model X batteries only experience a 12% loss after 200,000 miles. Since there are only a handful of EV nameplates today that also existed a decade ago, most EV battery packs are still in service. But automakers are preparing and planning for when they are ready to retire. Keeping EV batteries out of landfills is just one reason why battery recycling is important. Recycling end-of-life packs for the manufacturing of new packs is crucial to make battery production more sustainable and affordable. It also helps reduce U.S. dependence on foreign sources of battery materials.

The U.S. government has recognized the need for EV battery recycling. The Department of Energy created a lithium-ion battery recycling R&D center called ReCell Center at the Argonne National Laboratory in 2019. According to the Argonne National Laboratory's website, Daniel R. Simmons, assistant secretary of DOE's Office of Energy Efficiency and Renewable Energy, said, "This center will create jobs and create a national supply of lithium-based battery materials, as well as spur the adoption of an affordable electric vehicle economy." But as with most new industries, there are challenges ahead.

Before we get into the different ways EV batteries are recycled, let's examine why recycling is important. Lithium-ion batteries power EVs and consumer electronics such as laptops and cellphones. If the batteries aren't properly disposed of, reused or recycled, they can end up in landfills and potentially leak metals and other hazardous materials into the soil and nearby water sources. Over time, it can be detrimental to the local environment and population if enough lithium-ion batteries are improperly disposed of.

Battery recycling will also reduce our reliance on sourcing raw materials from countries with poor human rights records. The Council of Foreign Relations says that more than 70% of the world's cobalt, an important metal in lithium-ion batteries, is produced in the Democratic Republic of the Congo. According to the organization, Congo has severe human rights issues in its mining operations, including child labor.

The importance of battery recycling came to the forefront with the Biden administration's Inflation Reduction Act of 2022, which changed the rules for the EV tax credit. If automakers want their EV models to qualify for the full $7,500 tax credit, a certain percentage of the vehicle's battery must be assembled or manufactured within North America, and a certain percentage of the critical minerals (such as rare-earth metals) in the EV's battery must come from the U.S. or one of its free-trade partner countries. This will encourage EV battery makers to purchase raw materials from the U.S. (or a free-trade country) sources, which include battery recycling companies.

Recycling EV battery packs is relatively new for the lithium-ion battery recyclers, but several companies have already started and have forged partnerships with EV manufacturers. Redwood Materials, which former Tesla CTO JB Straubel heads, is a major player. The company has partnered with Ford, Toyota, Volkswagen and Volvo to recycle end-of-life EV batteries. Redwood Materials says its recycling process can reclaim more than 95% of lithium-ion battery components including nickel, cobalt, copper, aluminum, lithium and graphite. Li-Cycle and Cirba Solutions are other large EV battery recycling companies collaborating with various automakers.

Some EV manufacturers, like Tesla, have already been recycling spent battery packs. The company claims that 100% of the used battery packs it receives are recycled in-house and that up to 90% of the raw materials are recovered. According to SAE International, GM has recycled or reused all of the battery packs it gets from customers since 2013. Mercedes-Benz recently announced that it's building its own battery recycling factory in Germany. The factory will use hydrometallurgy (more on that method below), which has a recovery rate of over 96%.

There are three main methods of recycling EV batteries: pyrometallurgy, hydrometallurgy and direct recycling. Pyrometallurgy is a method that first crushes and shreds the battery then uses extreme heat to smelt the metals in batteries into an assortment of alloys. However, according to Total Environmental Solutions, many raw materials, such as lithium and aluminum, are lost in the process. Cobalt and nickel can be recovered, but much is still lost. Pyrometallurgy isn't ideal because it is expensive, uses a vast amount of energy and emits pollutants into the air, including carbon dioxide. Some recycling companies like Redwood Materials use a combination of pyrometallurgy and hydrometallurgy to recover more raw materials.

The hydrometallurgy method is more environmentally friendly and growing in popularity. It's done by soaking the batteries in strong acids to extract the metals. When compared to pyrometallurgy, more materials like lithium and aluminum are recovered. Total Environmental Solutions says this process requires less energy consumption and produces significantly fewer greenhouse gases. Li-Cycle's website says, "Li-Cycle's environmentally sustainable process produces no wastewater, minimal solid waste, and emissions, and is the most energy-efficient process that is commercially available today." But hydrometallurgy is more complicated than pyrometallurgy. Before the batteries are soaked in acids, recyclers must prepare the batteries by removing unwanted materials and draining their charge, according to Darcy Partners.

The third and less common method is direct recycling. The emerging method doesn't use heat or acids; instead, the battery cell is discharged and physically disassembled. This means most of the battery's components stay intact and can be reused — in some cases, this includes the cathode, a battery cell component with significant value. According to the U.S. Department of Energy, direct recycling is a low-energy method that has more economic benefits and produces less greenhouse emissions than hydrometallurgy and pyrometallurgy. It's also more beneficial to battery producers that recycle their own batteries because they know exactly what they are recycling and can reuse the materials to make more of the same type of battery cell.

However, this method is difficult to employ on a commercial scale for battery recyclers because if the battery is not labeled, it's difficult to know which of the many battery chemistries is being recycled, says Darcy Partners. Also, according to Science.org, a recovered cathode might have little value if that type isn't being used anymore, and dismantling the battery can be very time-consuming because batteries aren't designed with recycling in mind.

Regardless of how EV batteries are recycled, the goal of battery makers is a closed-loop recycling system. In the case of EV batteries, closed-loop recycling means harvesting materials from spent batteries to make new batteries with the same chemistry. Once EV battery recycling is scaled up and improved, a closed-loop system will make battery production more sustainable and affordable because manufacturers don't have to purchase mined virgin materials.

Battery manufacturers and automakers have another option aside from recycling. When battery packs lose enough capacity, they aren't viable for electric vehicles anymore, but they still have plenty of life left and can be used in other ways. Reusing battery packs is already happening with stationary energy storage applications. Just one of many examples is Nissan's partnership with Relyion Energy. According to Business Insider, Relyion will receive used Leaf battery packs from Nissan and reuse them in large energy storage systems for commercial clients in various industries. When the rest of the battery's life is depleted during its second-life application, then it's ready for recycling.

Recycling EV batteries has several benefits. One of the most crucial is to help fill the demand for raw materials for EV battery production. EV sales and production are rising rapidly. The Edison Electric Institute projects that 26.4 million light-duty electric vehicles will be on U.S. roads by 2030. That number, however, does not include heavy-duty vehicles or motorcycles. The White House says the U.S. currently has about 3 million EVs. That means the demand for battery materials like nickel, cobalt and lithium could increase at a rate that might make it hard for suppliers to meet. Business Insider says Tesla CEO Elon Musk and Rivian CEO RJ Scaringe have sounded warnings of EV battery supply chain shortages in the coming years. Last year, according to CNBC, Stellantis CEO Carlos Tavares said that a shortage of raw materials will slow EV adoption by 2027-2028. The International Energy Agency (IEA) states that extensive battery recycling "can ease demand pressure and avoid bottlenecks."

But recycling is about more than just meeting the material demands of EV battery production. Per the IEA, "In the short term, the greatest obstacles to continued strong EV sales are soaring prices for some critical minerals essential for battery manufacturing, as well as supply chain disruptions ... ." IEA states COVID lockdowns in China and the Russia-Ukraine war as examples of such supply chain disruptions. After Russia invaded Ukraine, the price of nickel, a metal used in EV batteries, skyrocketed. According to Forbes, in the second week of March 2022, the price of nickel was five times higher than earlier in the year. And if the price hike had become permanent, Forbes said the price of EVs could have risen by $1,000. The media company also says that sourcing nickel from Russia, one of the few countries that mine high-grade nickel needed for EV batteries, became much more complicated after the invasion.

There are also environmental benefits to recycling. Mining and refining the raw materials that EV batteries use is energy-intensive and isn't environmentally friendly. For example, producing lithium, a major component of EV batteries, consumes a lot of water. It takes roughly 2 million tons of water to produce one ton of lithium, which is enough for about 100 EV batteries, according to Earth.org. This has caused water depletion issues in some lithium-producing countries like Chile. Using raw materials from recycled EV batteries instead of mined virgin materials helps reduce the environmental impact of producing EV batteries. EV battery recycling can also be energy-intensive but is significantly less than mining raw materials.

U.S. News says that according to the American Chemical Society, "Under idealized conditions, retired batteries could supply 60% of cobalt, 53% of lithium, 57% of manganese, and 53% of nickel globally in 2040." If so, then battery recycling can help supplement the future demand for raw materials and reduce the impact of supply chain disruptions and the need to mine virgin raw materials.

There aren't that many lithium-ion battery recycling companies today because creating one requires a lot of capital. The cost of building a factory is high if specialized equipment is needed, and as in the case of pyrometallurgy, it's also energy-intensive. On top of that, many of the raw materials are lost using certain recycling methods like pyrometallurgy, which lowers profitability.

What also hurts profitability is the constantly fluctuating prices of raw materials. For example, according to Reuters, the price of cobalt (one of the metals extracted from lithium-ion battery recycling) dropped significantly — from $40 per pound last May to just under $16 at the time of this publication. If the price drops low enough, it would be difficult for recyclers to make a profit from it. In addition, the minerals used in EV batteries will change over time. Manufacturers, for example, are trying to use fewer rare earth metals such as cobalt. If a current EV battery is recycled 10 years from now, its cobalt might not be worth much if future EV batteries require less to produce.

The fact that EV batteries aren't designed with recycling in mind is another challenge for recycling companies. EV battery packs are hard to disassemble because they are complex and don't have standardized designs. Some battery packs contain thousands of individual cells held together by glue, and according to Chemical and Engineering News, they also include components that recyclers don't need such as sensors, safety devices and circuitry, which all add more difficulty to the recycling process and cost. Making things more complicated are the various battery chemistries recyclers have to deal with. As stated by Science.org, the three main types of EV batteries are nickel-cobalt-aluminum, iron-phosphate and nickel-manganese-cobalt. Battery recyclers don't always know what kind of batteries they receive because manufacturers aren't required to label them. This makes it challenging to create an efficient recycling system and adds to the cost of recycling, which can make newly mined materials cheaper for battery makers to buy.

Transporting the battery packs to recyclers is another challenge. According to Mark Gillies, director of Public Relations and Reputation for Volkswagen Group of America, "All batteries and modules for recycling are considered universal waste and must be shipped as Class 9 hazardous materials, which is very expensive and constitutes the bulk of the cost of recycling." Once the volume of spent battery packs increases, battery makers need to figure out an efficient and cost-effective way to transport them in order to make recycling more viable.

A more obvious challenge is the dangers associated with lithium-ion battery recycling. The battery packs are high-voltage and can also catch fire and explode if not handled correctly. If they explode, the battery cells release toxic chemicals into the air. To add to factory employee safety concerns, pyrometallurgy factories use large furnaces heated to extreme temperatures, and hydrometallurgy requires various harmful acids.

Lithium-ion battery recycling is still in its infancy and needs time to grow into an efficient, profitable and sustainable industry. Currently, the demand for EV battery recycling is low, but the rapid rise of EV production will necessitate the growth and evolution of the industry. According to Ars Technica, Redwood Materials is already profiting from lithium-ion batteries found in small electronics and believes recycling EV battery packs will become profitable once more of them become available.

There are many challenges that EV battery recycling will face over the next several years, but advancement will happen, not only for the sake of the environment and supply chain but also because the EV battery recycling industry will become lucrative. Meticulous Research projects the industry will be worth $15.8 billion by 2030. "While we cannot yet get commercial quantities of cathode grade materials from recycling, the industry is already producing copper foil in commercial grade and quality," says Gillies. "We anticipate that recycled cathode grade materials will be available to battery producers within the next year," he added. That's an essential step in the right direction.