Car makers are electrifying fleets at such a pace that battery makers can't keep up. So Tesla, GM, Ford and others are investing in battery recycling to cut costs and mitigate risks posed by an erratic international supply chain.

Batteries are basically high-grade ore and a cheaper and more environmentally friendly way for materials to be extracted and reused, said Elon Musk, CEO of Tesla, during a [1]shareholder meeting last week.

"It pays to do recycling of batteries," Musk said, adding: "You can either get your lithium and your nickel and various constituents from rocks, or from batteries. It's much better to get them from batteries."

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There are about two billion cars and trucks used in the world, and electric cars are well under 1 per cent of the fleet, Musk said. Tesla can't get enough batteries from their suppliers to meet the demand for its cars so recycling batteries is one way to address the shortage.

[3]

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"Some suppliers ask me outright – are we going to put them out of business or something? Not at all, as many cells as you want to make and supply to us at an affordable price, we will buy. No limit," Musk said.

Less than 5 per cent of lithium-ion batteries are recycled today due to the difficulty and cost involved in getting batteries to facilities, according to Pitchbook Data.

[5]

The market for spent batteries is just $2bn now, and Pitchbook estimates that will grow to $27.3bn in 2030. Investment in car battery recycling skyrocketed this year. Ford, for example, invested $50m in Redwood Materials to recycle battery packs in its cars.

Production of battery-operated electric vehicles around the world is expected reach 16 per cent of total vehicle production by 2028, research firm Gartner said. Recycling batteries will help to offset material costs, wrote Sridhar Srinivasan, an analyst at Gartner.

Battery recycling policies until last year mostly focused on devices like smartphones and laptops. The European Battery Directive formulated in 2006 ignored cars as the Toyota Prius was the only major battery-operated car roaming the streets.

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But last year the EU began [7]reformulating the directive with a new category for electric vehicles, making it easy to collect and dismantle spent car batteries, which will loop back into the supply chain.

GM is projecting an all-electric future, and said it plans to ship 30 electric vehicles by 2025. GM, through a joint venture with LG Energy Solution called Ultium Cells, has partnered with third-party Li-Cycle to recycle up to 100 per cent of the material scrap that could be reused to make new batteries.

Li-Cycle will recycle end-of-life batteries and sell them back into the supply chain. The company's factory in Kingston, Ontario, which opened this year, is now processing 5,000 tons of spent lithium ion, and has secured contracts with 70 battery supply customers across several industries.

Recycling will make car batteries cheaper, and make products like electric vehicles more affordable, Li-Cycle CEO Ajay Kochhar told The Register .

"Recycling will be essential in providing a secondary supply of critical materials as a sustainable complement to mining," Kochhar said, adding: "By 2025 it is expected that there will be over 2 million tonnes of lithium-ion batteries available for recycling globally, driven primarily by the electric vehicle revolution."

[8]Bolt electric car battery recall might have hurt General Motors, but LG will pay $1.9bn to sooth troubled feelings

[9]US road safety watchdog decides against probe into Tesla battery fires

[10]Tesla battery fire finally flamed out after four-day conflagration

[11]The UK is running on empty when it comes to electric vehicle charging points

A secondary supply will also help alleviate price pressure of critical materials such as lithium, cobalt, nickel, and manganese, Kochhar said.

Tesla's long-range cars use nickel-based cathodes because of higher energy density, but the company is moving to an iron-based chemistry for standard range and stationary storage, Musk said, arguing that nickel and iron are plentiful.

"A vast majority of batteries in the future will be iron based," he added.

The adoption of the highly recyclable aluminium-air battery chemistry – which has four times the capacity of lithium batteries – may take preference in the future, according to Gartner.

Recycling batteries may also give rise to new businesses like battery-as-a-service or a battery lease, said Richard Colley, head of policy & regulatory affairs at Arrival, in a [12]webcast hosted by Li-Cycle last week.

Some vehicles, like those in commercial fleets, will do a lifetime of miles within a very short period, and recycling batteries from those cars needs to be considered from day one, Colley said.

He also pointed out recycled batteries could ultimately reduce the cost of the vehicle or its operation.

With trade disputes, Europe and the US are formulating policies to take recycled materials from spent batteries in the domestic supply and loop it back to local or regional manufacturers, which will minimise reliance on an unstable foreign supply chain.

An [13]exploratory group set up within the California EPA is exploring policies pertaining to responsible collection and recycling of car batteries.

"Governments are thinking bigger when it comes to carbon/environmental taxes," said Matt Arcaro, IDC research manager, next-generation auto and transport. "Recycling drastically decreases the overall carbon consumption of a vehicle, as it allows the carbon needed to create the EV battery to be split into multiple applications or 'lives' via recycling." ®

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[1] https://www.tesla.com/2021shareholdermeeting

[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YWdXIg7Y7WcOEoZ8ZGRS4gAAAJI&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0

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[7] https://www.europarl.europa.eu/RegData/etudes/BRIE/2020/654184/EPRS_BRI(2020)654184_EN.pdf

[8] https://www.theregister.com/2021/10/12/lg_gm_bolt_recall/

[9] https://www.theregister.com/2021/10/05/nhtsa_tesla_battery/

[10] https://www.theregister.com/2021/08/03/tesla_megapack_fire_australia/

[11] https://www.theregister.com/2021/07/28/uk_ev_charging_market_study/

[12] https://li-cycle.com/battery-recycling-day/

[13] https://calepa.ca.gov/lithium-ion-car-battery-recycling-advisory-group/

[14] https://whitepapers.theregister.com/