Old EV Batteries Look Like a Gold Mine for Dogged Entrepreneurs

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Electric vehicles have been coming for more than a decade; now they are starting to go as well.

Like wind turbines and nuclear fuel rods, car batteries don’t last forever. Today, 13 years after the 2008 Tesla Roadster made its debut, a first generation of EVs is nearing retirement. The cars, and their 1,000-pound battery packs, are creating a mountain of electronic scrap.

Several entrepreneurs have begun pulling those batteries out of the pile, cracking them open, and cooking them down to recover cobalt, lithium, nickel, and other raw ingredients that can be recycled almost endlessly. It’s an expensive and laborious endeavor—like building an EV was 20 years ago. It’s also on the cusp of massive growth.

Old EV Batteries Look Like a Gold Mine for Dogged Entrepreneurs

J.B. Straubel, a co-founder of Tesla who now runs Redwood Materials, a battery recycling enterprise in Nevada, calls this “unmanufacturing.”

“This is a decidedly not very sexy business,” he says. “But it’s about to become incredibly relevant.”

Redwood, along with Canada startup Li-Cycle, is joining existing recyclers such as Belgian chemicals giant Umicore and China’s GEM, which has automated disassembly lines for spent packs. Battery warranties on EVs typically cover 8 to 10 years; on the first wave of models, they’re just expiring.

In 2030 the world’s drivers and fleets are expected to buy almost 26 million electric vehicles a year, and junkyards will take in almost 1.7 million metric tons in scrapped batteries, according to BloombergNEF. By then, recyclers should be producing tens of thousands of tons of metals to feed back into battery production, including 125,000 tons of nickel. Although that will be less than 10% of forecast battery sector demand for the metal, it could help ease automakers’ concerns over potential supply crunches.

Pressure also is building from consumers and investors who want producers to limit the environmental impact of car assembly and to curb their reliance on extractive industries, particularly in Congo, where some cobalt mines have been accused of using child labor.

Europe and China require battery producers or the auto sector to keep retired packs out of landfills, incentivizing efforts to recycle parts. These incentives—the U.S. could try a similar requirement—are spurring the development of the recycling sector.

For now, collecting, transporting, and stripping down EV packs to recover metals is mostly a money-losing endeavor, and it could be decades before the U.S. and Europe have enough used cells to challenge nations such as China. Raw materials account for only $2,000 to $3,000 of the cost of an average $14,000 battery pack, according to BNEF. And volatile commodity prices make it tough to predict recovered metals’ value.

Recyclers will face steady declines in the cost of making batteries as production scales up and cheaper options replace pricier metals, including cobalt. Battery prices fell 89% in the 10 years from 2010 to 2020 and will fall by more than half again by 2030, BNEF estimates.

Redwood is able to sell some materials at a profit now, Straubel says. Others are making money, too, such as Brunp, the recycling unit of Contemporary Amperex Technology Co. Ltd.

Old EV Batteries Look Like a Gold Mine for Dogged Entrepreneurs

Batteries are quickly becoming the connective tissue of our collective energy use: They will be to transportation what the cardboard box has become to commerce. Li-Cycle, based in Ontario, is preparing for the complex logistics of that future. It’s building a system of facilities—dubbed “spokes”—that will take in batteries, break them down, and feed the smaller, lighter chunk of valuable material back to a central hub for final processing at the old Eastman Kodak plant in Rochester, N.Y. The process cuts about 60% of the shipping weight, according to Chief Commercial Officer Kunal Phalpher.

Rather than melting or dissolving battery cathodes—one of the two electrodes that store and release a charge—some scientists are working on how best to extract them intact, recondition them, and put them right back in new batteries. That’s the focus of one initiative from ReCell, an alliance of U.S. government labs working with universities.

“At the end of the day, battery recycling needs to be profitable,” says Jeff Spangenberger, director of the initiative. “Economies of scale are really going to help, but right now there are a lot of batteries out there that cost money to recycle.”
 
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