EV Battery Recycling Market Size & Forecast

The EV Battery Recycling Market is expected to reach $10.1 billion by 2031, at a CAGR of 40.9% from 2024 to 2031. The growth of this market is driven by the increasing demand for electric vehicles, stringent regulatory frameworks for battery recycling, and increasing concerns over the depletion of raw material resources. However, safety issues related to the storage and transportation of used batteries restrain the growth of this market. Increasing government incentives for battery recycling and innovations in battery recycling technologies are expected to generate market growth opportunities. However, the high costs of recycling EV batteries are a major challenge for the players operating in this market.

Furthermore, increasing investments in battery recycling infrastructure in emerging economies is a key trend in the EV battery recycling market. Additionally, the increasing investments in battery recycling infrastructure in emerging economies is a prominent trend in the EV battery recycling market.

EV Battery Recycling Market Growth Drivers

Increasing Concerns Over the Depletion of Raw Material Resources

In today’s world, characterized by the growing demand for battery-powered devices and electric vehicles (EVs), the conservation of vital natural resources has become imperative. The production of EV batteries requires substantial amounts of rare and valuable materials such as cobalt, nickel, and lithium. However, these materials are finite, expensive to mine, and have significant environmental footprints.

According to Redwood Materials (U.S.), electrification is projected to increase the demand for lithium-ion batteries by over 500% by 2030. Furthermore, according to IEA (France), in 2022, the demand for lithium exceeded its supply (as in 2021) despite a 180% increase in production since 2017. In 2022, about 60% of the demand for lithium, 30% for cobalt, and 10% for nickel was for EV battery manufacturing. Five years earlier, in 2017, these shares were around 15%, 10%, and 2%, respectively. Like lithium, the mining and processing of these critical minerals must be scaled up rapidly to support the energy transition, not only for EVs but more broadly to keep up with the demand for clean energy technologies.

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Lithium, nickel, cobalt, and copper inside EV batteries are all mined from the earth. Battery recycling infrastructure and capabilities need to be improved to reduce the need for mining these materials. Millions of tons of batteries are expected to be decommissioned over the coming decades. By recycling the battery packs of end-of-life electric vehicles, materials can be extracted and reused to make smaller batteries (if the materials are usable) or other components. Thus, EV battery recycling can reduce the need for new mining operations as the requirement for these materials will be reduced. Battery recycling not only extends the lifespan of these precious resources but also lessens the environmental toll associated with their mining and processing.

EV Battery Recycling Market Trends

Increasing Investments in Battery Recycling Infrastructure in Emerging Economies

Electric vehicles are evolving with ongoing developments in the automotive sector. Consumers’ increasing preference for shared mobility, the growing adoption of Mobility as a Service (MaaS), and the declining costs of high-capacity batteries are encouraging EV manufacturers to invest in EV battery recycling processes. Companies in India are gearing up their recycling operations. For instance, Ziptrax Cleantech Pvt Ltd. (India) is setting up a plant in Delhi NCR with an initial investment of USD 35 million (INR 3.5 crore). The plant will process 2 tons of lithium-ion batteries per day. Also, Tata Chemicals (Mumbai) launched lithium-ion battery recycling operations in Mumbai to recover raw materials from batteries. The company extracts 99% pure lithium, cobalt, nickel, and manganese, which is expected to reduce environmental pollution and save energy and natural resources.

In March 2022, Tupy (Brazil), BMW Group Brazil, and Senai Paraná (Brazil) announced plans to develop a project to recycle BMW vehicles’ lithium-ion battery cells with an initial investment of over USD 0.62 million (R$ 3 million). Also, in December 2020, Ganfeng Lithium Co., Ltd. (China) announced the opening of its lithium battery recycling plant in Mexico. Such initiatives are expected to further support market growth in the coming years.

EV Battery Recycling Market Opportunity

Government Incentives for Battery Recycling Accelerating Market Growth

Improper disposal of batteries can lead to pollution and environmental degradation. Hence, countries across the globe are focused on optimizing battery recycling processes to prevent battery waste from being disposed of as municipal solid waste. In addition, battery recycling can help reduce the mining of raw materials, benefiting the environment.

Governments around the world are introducing incentives for battery recycling. For instance, in December 2022, Nevada’s (U.S.) Office of Economic Development approved USD 105 million in tax incentives for the expansion of Redwood Materials’ lithium battery recycling plant in northern Nevada after the company announced plans to invest USD 1 billion in expanding its facility to accelerate the transition from fossil fuels to lithium batteries by localizing the supply chain. Also, in February 2022, the U.S. Department of Energy (DoE) issued two notices of intent to provide USD 2.91 billion to boost the production of advanced batteries that are critical to rapidly growing clean energy industries of the future, including electric vehicles and energy storage, as directed by the Bipartisan Infrastructure Law. The Bipartisan Infrastructure Law will fund projects that bolster domestic battery manufacturing and recycling to support the growing demand for electric vehicles and energy storage.

Furthermore, governments are investing in EV battery recycling projects, creating market growth opportunities. For instance, in November 2022, the U.S. government announced USD 74 million in funding for 10 projects to advance processes and technologies associated with lithium-ion battery recycling and reuse. Such developments are expected to increase battery recycling globally, creating market growth opportunities.

Innovations in Battery Recycling Technologies

The growing demand for batteries used in electric vehicles and affordable energy storage solutions (for workplaces and homes) has boosted the need for innovative battery recycling technologies. Hence, the players in the battery recycling industry are actively looking for innovative ways to recycle batteries from the home energy storage and EV sectors. Market players are incorporating fully automated recycling processes to maximize the recovery of materials from EoL batteries. For instance, in June 2023, Comau announced plans to test and validate its automated robotic cell for the safe dismantling of electric vehicle batteries as part of the European Union’s Flexible Battery Dismantling project. Also, in May 2022, Hydrovolt, a joint venture between Hydro (Norway) and Northvolt (Sweden), started a commercial recycling operation at its plant in Fredrikstad, Norway. The joint venture uses a fully automated recycling process to enable about 95% of metals to be recovered from batteries.

Furthermore, Evonik Industries, a German specialty chemicals company, is helping recycle lithium from electric car batteries as a part of its innovation drive. According to the company, about 95% of the lithium in EV batteries is not recycled due to the high costs. Hence, Evonik is working to make battery recycling more efficient by using an electrochemical process with a ceramic membrane. Such innovations are trending in the battery recycling market. Additionally, government-supported research and innovation projects, such as the EU’s European Battery Alliance and the United States’ National Science Foundation Phase II Small Business Innovation Research, are accelerating innovation in recycling technologies.

EV Battery Recycling Market Analysis: Key Findings

By Battery Type: In 2024, The Lithium-ion Batteries Segment to Dominate the EV Battery Recycling Market

Based on battery type, the global EV battery recycling market is segmented into lithium-ion batteries (Li-ion), sealed lead acid batteries (SLA), nickel-metal hydride batteries (Ni-MH), ultracapacitors, and other batteries. In 2024, the lithium-ion batteries segment is expected to account for the largest share of 78.3% the global EV battery recycling market. Factors such as the increasing adoption of electric vehicles, the rising need to recover valuable materials from Li-ion batteries to reduce the need for new mining and processing of raw materials, and the growing need for high energy density and low self-discharge rate batteries for EVs contribute to the significant market share of this segment.

By Battery Source: In 2024, The Commercial Vehicles Segment to Dominate the EV Battery Recycling Market

Based on battery source, the global EV battery recycling market is broadly segmented into commercial vehicles, passenger cars, e-scooters & motorcycles, and E-bikes. In 2024, the E-bikes segment is expected to account for the largest share of 64.8% the global EV battery recycling market. The large market share of this segment is attributed to the rising adoption of e-bikes worldwide.

However, the commercial vehicles segment is expected to record the highest CAGR during the forecast period of 2024–2031. The growth of this segment is driven by the high demand for electric public transportation and logistics services, the rising need to manage the disposal of used batteries, the increasing demand for low-emission commuting, and supportive government initiatives aimed at promoting zero-emission transportation through commercial EVs.

By Business Model: In 2024, The Contractual Recycling Services Segment to Dominate the EV Battery Recycling Market

Based on business model, the global EV battery recycling market is segmented into contractual recycling services and direct-to-market. In 2024, the contractual recycling services segment is expected to account for the larger share of 86.0% the global EV battery recycling market. The large market share of this segment is mainly attributed to the increasing government incentives for battery recycling, stringent laws for the recycling of EV batteries, the increasing revenue streams for companies involved in the EV battery recycling market, and the growing need to reduce the cost of raw materials for new EV batteries.

By Recycling Process: In 2024, The Pyrometallurgical Process Segment to Dominate the EV Battery Recycling Market

Based on recycling process, the global EV battery recycling market is segmented into direct physical recycling process, pyrometallurgical process, hydrometallurgical process, and other recycling processes. In 2024, the pyrometallurgical process segment is expected to account for the largest share of 42.7% of the global EV battery recycling market. The large market share of this segment is attributed to the growing need to remove organic material from Li-ion batteries and extract metals from ores with low metal content and the increasing demand for scalable, flexible, low-cost, and low-environmental impact recycling processes.

However, the hydrometallurgical process segment is projected to register the highest CAGR during the forecast period of 2024–2031, due to the growing need to extract a wide range of materials, including copper, lithium, silver, nickel, and zinc, the increasing need for selective separation of materials through chemicals, and the rising demand for low energy consumption, less waste, and low-environmental impact processes.

By Material: In 2024, The Graphite Segment to Dominate the EV Battery Recycling Market

Based on material, the global EV battery recycling market is broadly segmented into graphite, nickel, cobalt, copper, manganese, lithium, aluminum, iron, plastics, and other materials. In 2024, the graphite segment is expected to account for the largest share of 18.5% of the global EV battery recycling market. The large market share of this segment is attributed to the high recycling rate of sealed lead acid batteries (SLA) and the increasing need to recover valuable materials from used EV batteries to reduce the need for the mining of new resources.

However, the lithium segment is projected to register the highest CAGR during the forecast period of 2024–2031. This growth is driven by the increasing R&D initiatives and innovations in lithium-ion batteries, the growing need to address the shortage of critical raw materials for EV battery production, and supportive government regulations and policies aimed at promoting EV adoption.

Geographical Analysis

In 2024, Asia-Pacific Region to Dominate the EV Battery Recycling Market

In 2024, Asia-Pacific is expected to account for the largest share of 69.1% of the global EV battery recycling market. Asia-Pacific EV battery recycling market is estimated to be worth USD 0.63 billion in 2024. The large share of the region is attributed to the due to the growing implementation of policies and initiatives to reduce the amount of EV battery waste and toxic substances in the environment, the rising concerns regarding the depletion of precious and rare earth metals, the growing demand for lithium-ion batteries, the increasing volume of battery waste generated, and the high adoption of electric mobility in the region. However, the Middle East & Africa is projected to register the highest CAGR of during the forecast period.

EV Battery Recycling Market: Key Companies

The report offers a competitive analysis based on an extensive assessment of the leading players’ product portfolios, geographic presence, and key growth strategies adopted in the last 3–4 years. Some of the key players operating in the EV battery recycling market are Glencore plc (Switzerland), Fortum Corporation (Finland), Umicore NV (Belgium), Li-Cycle Holdings Corp. (Canada), Lithion Recycling Inc. (Canada), Tata Chemicals Limited (India), SNAM S.A.S. (France), Ascend Elements, Inc. (U.S.), ACE Green Recycling, Inc. (Singapore), Redwood Materials, Inc. (U.S.), Primobius GmbH (Germany), Attero Recycling Pvt. Lyd. (India), ACCUREC Recycling GmbH (Germany), Trishulavel Eshan Pvt. Ltd. (India), BatX Energies Pvt. Ltd. (India), MTB GROUP (France), and Duesenfeld GmbH (Germany).

EV Battery Recycling Industry Overview: Latest Developments from Key Industry Players

• In October 2023, Stellantis N.V. (Netherlands) signed a MoU with Orano SA (France) to establish a joint venture for recycling end-of-life electric vehicle batteries and scrap from gigafactories in Europe and North America. The joint venture aims to produce materials often referred to as "black mass" or "active mass." These materials will undergo refinement at Orano's hydrometallurgical plant in Dunkirk, France, enabling their reuse in batteries and contributing to the circular economy's closed-loop system.
• In September 2023, Volta Energy Solutions (Hungary) inaugurated its battery copper foil factory for electric vehicles in Canada, aiming to play an active role in the advancement of the EV battery industry.
• In April 2023, Fortum (Finland) opened Europe's largest closed-loop hydrometallurgical battery recycling facility in Finland.
• In January 2023, the UAE government announced plans to develop its first recycling plant for electric vehicle batteries to support green mobility, achieve a net-zero emissions goal by 2050, and create a circular economy.
• In January 2023, the U.S. government, with the Department of Energy, funded USD 74 million for EV battery recycling and reuse. Similarly, in August 2022, the U.S. Department of Energy (DOE) implemented a USD 335 million program to support battery recycling.
• In June 2022, Lithium Battery Recycling Solutions (LBRS) (U.K.), a part of the Cawleys Group (U.K.), partnered with Voi Technology (U.S.), a provider of e-scooters, to dispose of and recycle end-of-life batteries from electric vehicles.

EV Battery Recycling Market Research Summary

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