A new report from Wood Mackenzie says that lithium-ion battery recycling is not expected to take off before 2030, and China will remain as the key battery recycling centre in the long term, Kallanish reports.

The analysis by researcher Max Reid suggests that global electric vehicle penetration will reach 23% by 2030 and that, by 2040, 89% of lithium-ion battery demand will come from the electric vehicle sector. EVs now account for 7% of passenger car sales globally.

“Underneath the surface of this electric future lies a relatively young supply chain struggling to keep up,” Reid says in a statement. “The Li-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.”

Currently, battery recycling focuses on the portable electronics market and recyclers are benefitting from technologies with an easily accessible battery, compared to EV batteries, Reid says. EV packs are complex to disassemble so recyclers must discharge packs in conductive baths before mechanically shredding them into a black mass of materials. New battery packs cost less to produce, disincentivising battery recycling as the value of recovered material is reduced.

Battery manufacturers are leaning towards using cheaper materials, leaving recyclers to increase the efficiency of their processes to maintain profit, he says. New materials such as solid-state electrolytes will also require recyclers to retrofit their processes, he adds.

“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, while recyclers will struggle with the large mass and complexity of EV-packs,” Reid says.

A new cathode facility will produce 50,000 tonnes/year of nickel-manganese-cobalt material, while a recycling plant will typically process 50,000-100,000 t of e-waste – with the former equating to 400,000 battery EVs annually while the latter is taking in roughly 30,000 EV-packs per year, he says. Reid also points to the lack of recyclable feedstock as a major barrier. Batteries to be recycled will remain low because the number of end-of-life batteries to be recycled will remain low because EV penetration at the beginning of the decade will be much lower than at the end and EVs have increasingly long lifespans reaching up to 15 years, he says.

The lack of available secondary supply from recycling is evident, Reid’s analysis indicates. According to the analysis, the total capacity of planned recycling facilities will still overshoot feedstock in 2030 when end-of-life EV numbers begin to ramp up. That resulting supply imbalance will leave independent recyclers, especially in North America and Europe, in a scramble for used EV batteries. That means that China will remain the most appealing location for battery recycling, Reid says.

“Bullish expectations for Li-ion recycling may well lead to a rush of new entrants to the space,” he notes. “However, limitations on feedstocks mean that only the large and integrated will likely survive and reap the rewards in later years.”