Lithium-ion electric vehicle battery recycling is not expected to “take off” before 2030 despite a number of projects launching across the globe in the last two years.
New, cheaper virgin materials, and a lack of feedstock were named as major barriers to the lithium-ion battery recycling sector in a report by market analysts Wood Mackenzie (Wood Mac).
With economies of scale bringing down the cost of battery manufacturing, and cell makers “leaning towards using cheaper materials” recyclers must increase the efficiency of their processes to maintain profit, states the report.
Moreover, the introduction of new materials such as solid-state electrolytes will require recyclers to retrofit their processes.
Max Reid, research analyst Wood Mackenzie’s battery raw materials service, pointed to the lack of recyclable feedstock as a major barrier due to the limited number of end-of-life (EoL) batteries available for recycling, because EV penetration at the beginning of the decade is much lower than at the end—and EVs have lifespans reaching up to 15 years.
Need for recycling
The recycling sector is already aggressively scaling up, despite the lack of available secondary supply from recycling.
According to Wood Mac’s analysis, the total capacity of planned recycling facilities will still overshoot feedstock in 2030 when end of life (EoL) EV numbers begin to ramp up.
The resulting supply imbalance will leave independent recyclers, especially in North America and Europe, scrambling to secure a supply of used EV batteries, say Wood Mac.
That imbalance is, in part, because of China’s appealing location for battery recycling— with companies benefitting from greater integration with nearby cathode production plants— that allows them to bid much higher prices for used batteries than their Western counterparts.
This is unlikely to change until North America and Europe have developed more integrated raw material supply chains, notes the report.
Reid said: “Bullish expectations for lithium-ion recycling may well lead to a rush of new entrants to the space. However, limitations on feedstocks mean that only the large and integrated will likely survive and reap the rewards in later years.”
The lithium-ion EV pack recycling industry is highlighted by reports of potential shortages in the supply chain by 2030.
For example, market analysts Roskill predict lithium carbonate equivalent demand will increase 4.5 times to two million tonnes, and cobalt demand will almost double to 270,000 tonnes by 2030 (from 2020 figures).
Analysts CRU forecast EV battery makers will require around 120,000 tonnes, or nearly 45% of the total cobalt supply by 2025, compared with 39,000 tonnes last year.
A new cathode facility will produce 50 kilo-tonnes per annum (ktpa) of NMC (nickel, manganese and cobalt) material (enough for around 400,000 EVs), whilst a recycling facility will typically process 5-10 ktpa of e-waste (around 30,000 EV-packs yearly).
Wood Mackenzie predicts global passenger car sales will grow from just under 7% (of all electric vehicle sales) to 23% by 2030— with 89% of lithium-ion battery demand coming from the EV sector by 2040.
Max Reid, research analyst Wood Mackenzie’s battery raw materials service, said: “Underneath the surface of this electric future lies a relatively young supply chain struggling to keep up. The lithium-ion battery demand market can fluctuate over months and expanding upstream and midstream to produce battery materials involves lead times of several years.
“As it is a new industry, there is limited historic capacity to flip the switch on, and yet many see this as a ripe environment for recycling to make a tangible impact.
“This decade will see the supply chain further establish itself to be able to supply vast quantities of battery-grade chemicals and cathodes to cell manufacturers, whilst recyclers will struggle with the large mass and complexity of EV-packs.”