Li-ion battery recycling market to reach $31bn per year by 2040 — report

IDTechEx’s estimates also foresee the electric vehicle sector dominating and significantly driving the Li-ion battery recycling market from 2025 onwards, despite the fact that at present, most li-ion batteries available for recycling come from consumer electronics.

“With the rapid adoption of electric vehicles (EVs), the demand for li-ion batteries will grow significantly in the coming decades. In the meanwhile, there are increasing concerns over raw material supplies especially rare metals such as cobalt,” the report reads. “Recycling provides a crucial solution to raw material supply insecurity and price fluctuations. Through recovering critical raw materials from li-ion batteries, manufacturers can shield themselves from supply disruptions and also generate additional revenue streams.”

Data gathered by IDTechEx’s experts show that today, few spent li-ion batteries from laptops and mobile phones are recycled. However, they believe that different from consumer electronics batteries, it is much easier to build the collection network for EV batteries because when they can’t be used in the vehicles anymore, they need to be handled by professionals. 

“In many countries, the extended producer responsibility (EPR) requires the OEMs to take care of retired batteries. As EV batteries beginning to reach their end-of-life, we will see an exponential growth of retired EV batteries available for recycling in the coming decades,” the review states.

But the Cambridge-based firm believes that while the easier collection and sheer scale of EV batteries provide a huge opportunity, it also comes with technical and economic challenges. 

“The numerous designs and high voltage of EV battery packs mean safe disassembly will remain a complex and time-consuming stage,” IDTechEx reports. “Furthermore, the $/kWh value embedded within EV batteries will be lower compared to consumer electronics batteries, meaning recyclers will have to extract more material at higher purities and efficiencies if they want to break even on their recycling process.” 

Heated discussions

The market researcher points out that one of the hot discussions around end-of-life EV batteries is whether they should be recycled to obtain the raw materials or repurposed for a second life in alternative applications such as stationary energy storage. However, for its experts, the answer is very clear: 

“Whether retired EV batteries are repurposed or not, they will need to be recycled anyway in the end. In theory, recycling is the least sustainable measure in a circular economy and should be the last step when the batteries couldn’t be utilized anymore. In practice, however, many more factors are considered. Technologically, repurposing a second life for retired EV batteries won’t have any effect on its recycling — it will delay the recycling process and thus have an impact on the logistics and economics of recycling.”

The report emphasizes the importance of implementing proper battery collection systems whose design makes battery disassembly and sorting an easier process.

“Without an efficient battery collection network, the low volume of batteries to be recycled or the high cost of collection could damage the economics of recycling,” the report concludes.