Article
02 Nov 2021

Battery Waste: Recycling Opportunity in the EV Boom

Global Insights
Contributor(s): Citi Global Insights
The proliferation of electric vehicles has resounding implications across a host of related businesses. One is that the lithium-ion battery waste problem is set to grow in the coming years. A new report from Citi’s US Chemicals Research analyst P.J. Juvekar looks at the potential ramifications for the business of recycling.

Electric vehicles (EVs) have experienced tremendous growth in recent years. Their continued proliferation, led by penetration in Europe and China, coupled with the potential jumpstart from the U.S. infrastructure bill, will create a growing lithium-ion battery (LIB) waste problem five to seven years down the road.

LIB battery recycling is essential to eliminate waste, close the loop on metals demand, and create sustainable supply chains. End-of-life supply will predominantly come from two sources: manufacturing scrap from cathode and battery makers and end-of-life batteries from electric vehicles.

Bloomberg New Energy Finance projects that 50 Gigawatt hours (Gwh) of battery materials, including scrap, will be decommissioned in 2025, with that number rising to about 1100 Gwh annually in 2035.

As shown in the figure below, approximately 34% of new car sales in 2030 could be EVs, amounting to 32.6 mm in sales. Recent announcements from big car makers indicate that this trend is only getting stronger.

Global Plug-in Hybrid EV and Battery EV Historical Sales (mm units)

Source: Citi Research, IHS

 

The ramp-up in EVs eventually creates a waste problem, with a rapid increase in end-of-life batteries and scrap lithium-ion battery (LIB) material in eight to ten years after purchase of EVs. Most industry estimates suggest that roughly 10% of battery manufacturing capacity is offcut as scrap during the manufacturing process. This scrap creates a huge opportunity for battery recyclers to turn these back into usable materials.

Lithium-Ion Batteries Available for Recycling in 2025 (metric tons)

Source: Citi Research, Company Reports, Benchmark Mineral Intelligence

 

China and Europe are far ahead of the U.S. in EVs. But the shifting regulatory environment in the United States could jumpstart explosive growth. The potential Biden infrastructure bill would support continued EV growth and the potential for heightened battery regulation—for example, California requiring close to 100% recovery beginning in 2022. Citi Research expects that both incentives and regulations from governments and lofty goals from automakers will encourage further investment in the battery recycling space globally.

The report goes on to point out that competing technologies—for example, sodium ion batteries—could prove to be successful enough to gain market share over lithium-ion batteries. Li-ion technologies with lower-cost materials than cobalt and nickel—for example, lithium iron phosphate—could also proliferate. Finally, technologies such as hydrogen fuel cells may take up projected market share of battery technology, especially in the heavy-duty market. For more information on this subject, please see From a Battery End-of-life to Cycle-of-life, published 18 October 2021.

Citi Global Insights (CGI) is Citi’s premier non-independent thought leadership curation. It is not investment research; however, it may contain thematic content previously expressed in an Independent Research report. For the full CGI disclosure, click here.

 

Get in touch
If you need further assistance, Contact Us.

Why cookies on the Citi ICG website ?

This website uses cookies to give you the best user experience by personalizing your content and analyzing traffic. Without cookies, the site won't function as expected . If you want to learn more please read our Privacy policy.