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- Global Research
- Energy transition
EV battery recycling – a primer
Charged and ready to power ahead. The unstoppable rise of electric vehicles is creating a new challenge and question: what to do with all the dead batteries?
In 2025, close to one million batteries that run the world’s growing fleet of electric vehicles (EVs) will no longer be fit for purpose, in our view. We think this will signal the take-off point for a new, important and fast-growing industry that is only going to get bigger: the recycling of EV batteries to extract the valuable metals, such as lithium, cobalt, nickel and manganese, they contain.
While the sales of EVs go from strength to strength, their batteries only began to be retired in 2021, so there will be a significant increase in the number available for recycling in the next few years. Given that we expect the global EV adoption rate to increase further, the direction of travel for the recycling business is clear.
Not surprisingly, given China’s dominant role in the production and sales of EVs, the country is leading the way, with more than 80% of global battery recycling capacity as of 2021.
2025
Date by which c.1m EV batteries will no longer be fit for purpose, in our view
Source: HSBC
80%
Global EV battery recycling capacity accounted for by China in 2021
Source: BNEF
It is not just the significant growth in volume and the obvious environmental benefits that will drive this business. Carmakers will likely soon have to take action as policymakers tighten industry regulations, including the introduction of minimum levels of recycled material batteries must contain.
Recycling 101
The three key battery recycling processes are pyrometallurgy, hydrometallurgy and direct recycling:
- The pyrometallurgical process is somewhat outdated and uses more energy, as it is based on high temperature; one of the key advantage is that it does not require extensive pre-treatment, as the batteries are directly processed in a high-temperature smelting furnace without shredding and separation
- The hydrometallurgical process can achieve a 98%-plus recovery rate for key metals, such as cobalt, nickel and lithium; the process is also less energy-intensive and can be adjusted for different battery chemistries
- Direct recycling aims to reuse the active cathode materials directly after regeneration, and has the advantage of low carbon emissions and a relatively simple process; however, some batteries have different types of chemistries and a mixture of more than one active material
The industry is moving towards the hydrometallurgical process, which is less energy-intensive and has a higher recovery rate.
This report is dated as at 29 November 2022.
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