By WasteDive, Jacob Wallace.
The lithium-ion battery industry is staring down a huge increase in demand, spurred by explosive growth in electric vehicle manufacturing. In the United States, where just 1% of the raw and component materials for EV batteries are currently produced, recyclers believe they can meet the moment.
Over the course of just one week in September, four battery recyclers with U.S. operations announced collectively raising more than $255 million in new funding to expand their operations. American Battery Technology Company raised $39.1 million to support a new Nevada facility. Redwood Materials announced a $50 million investment from Ford to integrate battery recycling into the automaker’s supply chain. Li-Cycle received a $100 million investment from Koch Strategic Platforms to build out new recycling centers in North America and elsewhere. Battery Resourcers raised $70 million in funding to expand operations to Europe.
The money comes as automakers and battery cell manufacturers prepare to meet pledges — hastened by state and federal requirements — to dramatically scale up their production of electric vehicles over the next decade.
Mathy Stanislaus, interim director of the Global Battery Alliance, said global recycling would need to grow by 25 times its current capacity in order to meet demand for lithium-ion battery materials. Capturing the batteries coming out of aging and defective electric vehicles can help meet that capacity.
“The large volumes that are going to be coming off of EVs are still to come,” said Stanislaus, a former U.S. EPA assistant administrator. “We have a rare opportunity to really plan for that.”
Recyclers of spent batteries say they can implement systems now to capture and reintroduce the minerals such as lithium, cobalt and nickel that are needed for manufacturing into the supply chain. And it’s clear the industry is ready for growth: from April to September of this year, the forecasted amount of total lithium-ion batteries that will be available for recycling in North America by 2025 went up 65%, according to Benchmark Mineral Intelligence.
Experts at Benchmark and elsewhere anticipate that beginning in 2025, 398,000 tons of batteries will begin to age out of EV applications and will need to be reused, recycled or else become waste — four times the number of batteries aging out in 2018. Recyclers are now racing to ramp up capacity before the wave begins to crest.
The American Battery Technology Company (ABTC) is one such recycler ramping up capacity. The company has earned funding from industry heavyweights like BASF and government agencies such as the U.S. Department of Energy (DOE) by focusing on disassembling spent batteries in an efficient recycling process.
CEO Ryan Melsert said the discrepancy between critical mineral mining and refining versus cell and vehicle manufacturing capability in the United States is likely to get worse before it gets better. The nation’s industrial base for mining and refining has become anemic as those industries have shifted abroad. In comparison, large automakers like Ford and GM continue to attract talent and are well-positioned to aggressively expand into the electric vehicle market.
“We have some of the best vehicle manufacturing engineers in the world and large amounts of the cell manufacturing,” Melsert said. “But when it comes to mining and material processing, over the past few decades, the U.S. has just outsourced a lot of that work.”
That may change soon. In the bipartisan infrastructure bill working its way through Congress, a recent draft included over $6 billion in new funding for the battery manufacturing industry. Those funds are largely focused on growing the critical mineral sourcing Melsert said needs a boost.
Roughly half of that money could go toward recycling, a huge infusion into the nascent industry.
Wilson Ma, vice president of corporate development at Li-Cycle, said the Canada-based recycler was able enter the recycling market early, in 2016, partially by recycling the scrap that the rapidly expanding cell manufacturing sector is producing. That steady source of material has allowed Li-Cycle to expand and prepare for new feedstock sources today.
“A lot of people really thought it was going to be a problem 10 years from now, so i.e. at the true end of life for the vehicle,” Ma said. “In fact, what we’ve learned so far is that it’s not just the end of life batteries that provide the volumes for us to recycle, it’s actually the manufacturer scrap that comes off of these cell production plants that can also produce substantial volume.”
Li-Cycle currently processes 10,000 metric tons of lithium-ion batteries in North America, with plans to bring online an additional 20,000 metric tons of U.S. capacity by mid-2022.
Ma said that it’s “fairly early stages” for the battery recycling industry in North America, but he’s encouraged by government interest in supporting recyclers.
Several recycling executives said if the infrastructure provisions pass as outlined they would certainly take a hard look at accessing some of that additional funding. But no one is waiting for Congress to act before planning aggressive expansion.
“There’s huge growth in demand domestically, and there’s a shortage of metals period, let alone materials with low environmental impact,” Melsert said. “Our biggest hurdle right now is just that we’re scaling up as quickly as we can.”