Dead EV batteries turn to gold with U.S. incentives
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[July 21, 2023] By
Nick Carey, Paul Lienert and Victoria Waldersee
POOLE, England (Reuters) - A little-publicized clause in the U.S.
Inflation Reduction Act has companies scrambling to recycle electric
vehicle batteries in North America, putting the region at the forefront
of a global race to undermine China's dominance of the field.
The IRA includes a clause that automatically qualifies EV battery
materials recycled in the U.S. as American-made for subsidies,
regardless of their origin. That is important because it qualifies
automakers using U.S.-recycled battery materials for EV production
incentives.
Reuters interviewed more than a dozen industry officials and experts who
say that is kicking off a U.S. factory building boom, encouraging
automakers to research more recyclable batteries, and could eventually
make it harder for buyers in developing countries to buy old used EVs.
China handles virtually all EV battery recycling in a global market
projected to grow from $11 billion in 2022 to $18 billion by 2028,
according to research firm EMR. As more EVs are introduced and age out
of the vehicle fleet, that business will grow.
The minerals in those batteries - primarily lithium, cobalt and nickel -
are worth on average between 1,000 euros ($1,123) to 2,000 euros per
car, BMW sustainability chief Thomas Becker told Reuters.
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Those materials could be in short supply within a few years as
automakers boost EV production, but "can be recycled infinity times and
not lose their power," said Louie Diaz, vice president at Canadian
battery recycling firm Li-Cycle, which received a $375 million U.S
government loan for a New York plant slated to open later this year.
That funding helped bring forward the investment decision for the plant,
Diaz said.
JB Straubel, CEO of Redwood Materials, which was awarded a $2 billion
U.S. government loan in February to build out a battery material
recycling and remanufacturing complex in Nevada, said the IRA treats
recycled battery materials as locally "urban mined," or materials
recovered from scrap rather than obtained from mining.
That has encouraged U.S. companies to move faster on recycling efforts
than their counterparts in the European Union, which has focused instead
on mandates, including minimum amounts of recycled materials in future
EV batteries.
Recycling firms Ascend Elements, Li-Cycle and others are planning
European plants in the next few years, but access to funding and the
made-in-America incentive means several U.S. plants are already being
built.
"What it (the IRA) does is change the demand equation for battery
materials," said Mike O'Kronley, CEO of Ascend Elements, which already
has one recycling plant open in Georgia and has received nearly $500
million in Energy Department grants under the infrastructure law for a
plant in Kentucky slated to open in late 2023. "We need to keep those
valuable materials... so we can put them right back into EVs."
The race is on to build "closed-loop supply chains" where recycled
minerals are put into locally produced new batteries, said Christian
Marston, chief technology officer at Altilium Metals, which is building
a plant in Bulgaria and plans one in the UK by 2026.
"Everybody wants to control their own supply chain and nobody wants to
be reliant on the Chinese," he said.
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However, China still leads the race, announcing tougher standards and
increased research support for recyclers last month. After passage last
year of the U.S. Inflation Reduction Act, Chinese officials described
the legislation as "anti-globalization" and accused the U.S. of
"unilateral bullying."
RAPID GROWTH
Globally, there are at least 80 companies involved in EV recycling, with
more than 50 startups attracting at least $2.7 billion, virtally all in
the last six years, from corporate investors including automakers,
battery makers and mining giants like Glencore, according to
PitchBook.com data.
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![](../images/072123PIX/busine24.jpg)
Marc Trent, CEO of vehicle dismantler
company Charles Trent Ltd, opens up a specially-built, fire-safe
container for batteries salvaged from written-off electric vehicles
and hybrids in Poole, Britain, June 7, 2023. REUTERS/Nick Carey
![](http://archives.lincolndailynews.com/2023/Jul/21/images/ads/current/debbiesfloral_lda_060123.png)
The volume of EV batteries available for recycling should grow over
tenfold by 2030, said consultant Circular Energy Storage. Around
11.3 Gigawatt hours (GWh) of batteries reached end of life in 2022,
and that should rise to 138 GWh by 2030 - equivalent to roughly 1.5
million EVs - CES said.
Electric vehicle batteries can last for 10 years or more.
Some industry officials anticipate rapid growth means 40% of battery
materials used in new EVs could come from recycled stocks by 2040.
There is little existing U.S. recycling capacity today, and
virtually none in Europe.
At a facility in Poole in southern England, car breaker Charles
Trent Ltd has built two lines where workers deconstruct wrecked or
old vehicles to recycle everything. It has built special containers
for EV batteries, which are sold for research or used by
retrofitters electrifying fossil-fuel cars, partly because there is
nowhere to recycle them.
In Europe, EV batteries are currently shredded into "black mass"
that is shipped to China for recycling.
'LOSE NOTHING'
The race is on to squeeze the best price out of that black mass.
"The one who gets the highest yield at the lowest cost ... will win
this game," said Bruno Thompson, CEO of Cambridge, England-based
startup The Battery Recycling Company, which plans its first plant
in 2024.
Dallas, Texas-based Ecobat, which shreds batteries in Europe and the
U.S. for recycling elsewhere, has improved its recovery process so
around 70% of battery-cell lithium is available for recycling, said
chief commercial officer Thea Soule.
Eventually, Soule said, yields should reach levels close to 90% to
100%.
Getting better yields matters because the EU will mandate minimum
amounts of recycled lithium, cobalt and nickel in EV batteries
within eight years. The EU will also impose tough conditions on
recycling outside Europe.
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Those conditions will effectively keep recycling local, said Kurt
Vandeputte, senior vice president at Belgian materials firm Umicore.
There are also industry concerns about finding old EVs for
recycling. Today, anywhere up to 30% of Europe's old fossil-fuel
cars disappear overseas - to new owners in developing countries or
for scrap. Some automakers are trying to figure out how to keep tabs
on those EVs.
Nissan has turned to leasing EVs in Japan to maintain control of
batteries, while Chinese EV maker Nio leases batteries to customers
to retain ownership.
Keeping those minerals in Europe would cut off a cheaper source of
transportation for developing countries.
BMW's sustainability chief Becker said the value of battery
materials will hopefully make recycling more attractive than selling
vehicles abroad, but Europe must focus on ensuring those EV
batteries do not slip away.
"We've got to make sure we lose nothing," Becker said.
($1 = 0.8902 euros)
(Reporting By Nick Carey in Poole, England, Paul Lienert in Detroit
and Victoria Waldersee in Berlin, editing by Ben Klayman and Claudia
Parsons)
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