Growing Challenge of Battery Recycling as Electric Vehicles Increase : Focus on Chinese Processing

As the number of electric vehicles (EVs) on the road increases, the challenge of recycling the batteries (secondary batteries) used in these vehicles is becoming more prominent. This issue is gaining importance due to the anticipated surge in spent batteries, which presents both environmental and industrial implications. Market research firm SNE Research predicts that the global electric vehicle battery recycling market will grow from $8 billion in 2022 to $208.9 billion by 2040.

The battery and automotive industries, along with governments, are contemplating recycling strategies for lithium iron phosphate (LFP) batteries. While the number of EV models equipped with LFP batteries is rising, recycling these batteries is less profitable compared to traditional ternary (nickel-cobalt-manganese) batteries. Lithium, a crucial mineral in EV batteries, is recently dubbed "white oil" or "white gold." However, it is known that LFP batteries yield a smaller amount of extractable lithium.

Industry representatives argue that used batteries should be viewed as resources and actively utilized in the market. A representative from a car manufacturer that uses LFP batteries stated, “Globally, there is a shift towards commercializing LFP battery recycling. China is also tightening related laws and conducting government-led recycling initiatives.”

The European Union, in August of last year, enacted the Battery Regulation, providing a legal basis for promoting the recycling of all batteries, including EV batteries. This regulation mandates the application of the Extended Producer Responsibility (EPR) system, which holds producers accountable for recycling, leading to a rapid increase in specialized EV battery recovery companies.

Some organizations focus on phased usage of batteries rather than direct recycling. When inquired about battery recycling, Chinese EV manufacturer BYD responded, “We prioritize phased utilization over recycling, managing batteries based on their remaining value and performance condition for applications such as communications and energy storage systems (ESS). Batteries that do not meet the final stage criteria for phased utilization are submitted for recycling to extract lithium.”