Recycling may be a lucrative way to produce the components necessary for mass-produced electric vehicles.
- Battery recycling startups are beginning to find a new wind as the race for batteries that power electric vehicles (EVs) heats up.
- “The world’s biggest automakers are betting that recycled material from old batteries will help supply the metal they need to build electric cars. The latest wager is on a startup that says it can take advantage of the Inflation Reduction Act,” says The Wall Street Journal.
- There are existing companies that break down old batteries or scrap material from manufacturing, then assemble it into components for new batteries.
- Ascend Elements is a Georgia-based plant that opened in 2015 that says it can efficiently recycle used lithium-ion batteries into components for new batteries.
- Li-Cycle is another innovative company in the field, with an integrated spoke-and-hub technology network that both mines and refines.
- Investors from major auto manufacturers like Jaguar and SK Group, in addition to venture investors like Fifth Wall, have invested more than $300 million into the company, which is currently building a second larger plant in Kentucky and looking to expand further.
Why it’s important
Battery manufacturing for electric vehicles is becoming a major concern as the US and global economy shifts away from gas-powered vehicles. With limited supplies of rare earth materials necessary for vehicle production though, companies are searching for solutions.
“Some analysts say recycling startups could struggle to be profitable due to high costs and manufacturing challenges until the first generation of large-scale electric-car batteries is retired about a decade from now. Scrap from battery manufacturing will be the industry’s majority input until the mid-2030s,” says WSJ.
Backing up a bit
As we previously reported, the Inflation Reduction Act set aside $369 billion in climate change investments and research. Part of that includes a requirement to phase out gasoline-vehicle production by 2050.
Attempts are being made to find environmentally safe access to these minerals with some advocating for deep sea mining or other means as means to provide access to materials that can power electric vehicles, but concerns have been raised about how safe these will actually be.
“Investors are pouring money into recycling in part because nearly all new mines and processing facilities in the U.S. face local opposition due to worries about environmental damage,” says WSJ.
Panasonic and Honda have already inquired about building battery plants in North America, both to meet the demand for domestic auto-manufacturing and the bolster the supply chain away from Chinese production.
“Car makers are trying to limit their dependence on China, which dominates the battery supply chain,” says WSJ.