Why Recycling Matters - Battery Design

Battery recycling sits at the intersection of three converging pressures: a looming wave of end-of-life material, a structurally constrained primary supply chain, and a regulatory framework that is moving from voluntary to mandatory. Each of these alone would justify investment in recycling infrastructure. Together, they are driving one of the fastest-growing sectors in the battery industry.

2023 feedstock	2023 capacity	2030 capacity (announced)	2035 EV feedstock
~90 GWh	>300 GWh	>1,500 GWh	~430 GWh

if all announced projects are built, global capacity in 2030 could be roughly 7× the available feedstock. The competition for feedstock, not for processing capacity, is the commercial challenge of the current decade.
Recycling of Critical Minerals, IEA

The Volume Problem

The scale of end-of-life battery material heading towards recyclers over the next decade is difficult to overstate. End-of-life lithium-ion battery volumes are expected to reach approximately 900 kilotons in 2025, but with increasing EV adoption, this figure is projected to reach 20,500 kilotons by 2040.

Sources: IEA Global EV Outlook 2024; IEA Recycling of Critical Minerals 2024; BloombergNEF Li-ion Battery Recycling Market Outlook 2024; Circular Energy Storage Annual Report 2024. Feedstock = batteries available for recycling (end-of-life + manufacturing scrap). Capacity figures based on announced projects assuming 85% utilisation and 180 Wh/kg average cell energy density. Forecast years shown with dashed bars. Historical data to 2024; 2025–2035 forecast.

The composition of the recycling feedstock is also shifting. Today, the majority of material flowing into recyclers is not end-of-life batteries — it is manufacturing scrap. Manufacturing scrap currently dominates the feedstock for battery recycling, but this balance shifts rapidly towards end-of-life packs through the 2030s. The reason is timing: most of the EVs that will generate the first large wave of end-of-life batteries were sold between 2018 and 2022, and less than 10% of EVs reach end of life before they are 10 years old, meaning that vehicles placed on the market by the end of the 2010s, such as early Tesla Model 3s, will not reach end of life in really large quantities until after 2030.

When that wave arrives, it arrives fast. The volume of light electric vehicle batteries available for recycling is forecast to increase by 343% between 2030 and 2035, and the total volume of lithium-ion batteries available for reuse in 2035 will be larger than the entire lithium-ion battery market was in 2020.

The implication for recyclers is that the race is being run now, before the feedstock fully materialises. Those who establish proven processes, quality-assured outputs, and OEM supply agreements in the 2020s will be positioned to capture the volume surge of the 2030s. If all announced projects come online as scheduled, global recycling capacity in 2030 could be seven times the available feedstock — meaning the near-term constraint is not capacity but feedstock. Securing reliable, high-quality input streams is the commercial challenge of the current decade [1].

This post has been built based on the support of and sponsorship from: illumion, Custom Power, Quarto Technical Services, Eatron Technologies and About:Energy

The Supply Chain Problem

The cells that go into an EV battery pack are built from materials whose primary supply is geographically concentrated, subject to price volatility, and in several cases linked to supply chain risks that OEMs and governments are actively trying to reduce.

Between now and 2030, some 70–75% of projected supply growth for refined lithium, nickel, cobalt, and rare earth elements comes from today’s top three producers. For battery-grade spherical and synthetic graphite, almost 95% of growth comes from China. Refining operations for most minerals are set to remain highly concentrated over the next decade [2,3].

The risks embedded in this concentration are not theoretical. If the largest supplier and its demand is excluded — China for lithium, cobalt, graphite and rare earths, and Indonesia for nickel — the remaining supply would cover less than 55% of remaining demand for nickel, and only 65% for both lithium and cobalt. These are not comfortable margins for industries planning decade-long capital investment cycles.

The individual materials tell their own stories:

Cobalt is the most acute example. Over 70% of mined cobalt comes from the Democratic Republic of the Congo, where both production stability and ESG concerns around artisanal mining have been long-standing issues. Batteries drove 94% of cobalt demand growth in 2024. The pressure to reduce cobalt content in cathode formulations — the shift from NMC622 to NMC811, and the emergence of LFP and NCMA — is partly a direct response to this concentration and cost risk [4].
Lithium is the structural constraint. Lithium demand rose by nearly 30% in 2024. Despite the rapid scaling of supply from Australia, Chile, and China, lithium and graphite have the highest risk scores of any battery mineral in the IEA’s risk assessment framework — high on both supply volume risk and limited ability to respond to disruptions. Prices crashed by over 80% from their 2022 peak as supply expanded, but the same IEA analysis flags that falling prices make spending to ensure reliable and diversified supply less appealing to investors — creating a risk of underinvestment precisely when long-term supply security matters most [5,6].
Nickel faces a different kind of concentration: the top three producing countries for nickel will supply 85% of the market by 2035, up from 75% in 2024, with Indonesia dominant — and much of that Indonesian nickel supply is processed by Chinese-owned operations.
Graphite is perhaps the least-discussed critical material in battery supply chains, but almost 95% of projected battery-grade graphite supply growth through 2030 comes from China. China also introduced export controls on graphite in late 2023. This is a significant vulnerability that receives far less attention than cobalt or lithium.

Recycling changes this picture meaningfully, if not completely. An efficient recycling of end-of-life vehicle batteries could reduce the combined annual demand in new lithium, cobalt, nickel, and manganese mining by around 28% by 2040 in an accelerated recycling scenario. That is not a displacement of primary mining — the battery market is growing too fast for recycled supply to keep pace with total demand — but it is a significant cushion against supply disruption, price volatility, and geopolitical leverage [7].

Critically, recycled material also offers a route to domestically sourced supply. A battery recycled in Germany, the US, or South Korea returns its constituent metals to the local supply chain, reducing dependence on imports from politically sensitive origins. This supply chain security argument has become increasingly central to how governments and OEMs think about recycling policy.

Manufacturing Scrap Problem

End-of-life batteries are not the only source of recyclable material — and for the current decade, they are not even the primary one. Gigafactories generate substantial quantities of manufacturing scrap: electrode offcuts, defective cells, out-of-specification packs, and process waste from coating, drying, and formation steps.

Battery recycling capacity grew by 50% year-on-year in 2023, with China accounting for 80% of both pretreatment and material recovery capacity. Much of this capacity is currently processing manufacturing scrap rather than end-of-life vehicle batteries. As gigafactory production scales — global demand is projected to reach 4,700 GWh by 2030 — the volume of manufacturing scrap scales with it, providing a reliable near-term feedstock stream that is compositionally consistent and well-characterised compared to mixed end-of-life streams.

For recyclers, manufacturing scrap has significant advantages over end-of-life batteries: it is a known chemistry, requires no discharge or hazardous handling, and comes in a steady predictable stream under long-term contract. Scrap from gigafactories will be the primary source of recyclable battery material for the next decade, with end-of-life batteries not expected to become a major source until the 2030s. Proximity to major cell manufacturing hubs is therefore a competitive advantage for recyclers operating in this decade [8].

The Environment

Batteries are not emissions-free or resource-free to produce. The environmental case for recycling rests on two related arguments: reducing the carbon footprint of battery production, and preventing toxic materials from entering landfill and waterways.

Primary production of battery-grade cathode materials is energy-intensive. Mining, refining, and processing lithium, cobalt, nickel, and manganese generates significant CO₂, consumes large quantities of water (particularly lithium brine extraction in water-scarce regions of South America), and creates tailings and waste streams that require careful long-term management. Producing the same materials from recycled black mass, at lower temperature and with shorter process chains, reduces these impacts substantially.

Life cycle assessments consistently show that recycled battery materials have a significantly lower carbon footprint than primary equivalents. Hydrometallurgical recycling can reduce the global warming potential associated with battery cell production by around 39%, and combined pyro-hydro processes by around 27%, compared to using entirely primary materials. As the electricity grids used to power recycling facilities become greener, these benefits compound.

The end-of-life disposal risk is also real. A single EV battery pack contains lithium salts, fluorine-containing electrolyte and binder, heavy metals, and flammable organic solvents. Uncontrolled disposal — landfill, incineration, or informal recycling — creates environmental contamination risks and permanently destroys recoverable value. Establishing regulated, effective recycling infrastructure is both an environmental obligation and an economic opportunity.

The Economic Case

Recycling is, at its core, an economics problem. The case for investment in recycling infrastructure depends on the value of the recovered materials exceeding the cost of processing — and that calculation is sensitive to commodity prices, process efficiency, and feedstock volume.

A 75 kWh NMC battery pack contains meaningful quantities of recoverable value: lithium, cobalt, nickel, manganese, copper, and aluminium. The exact value fluctuates with commodity prices — and the sharp fall in battery metal prices since 2022 (lithium down over 80%, cobalt and nickel down 10–20%) has compressed recycling economics in the near term, making some operations marginal that were profitable at peak prices.

This price sensitivity is a genuine challenge for the recycling industry. It argues for process efficiency — driving down the cost of recovery so that operations remain viable across the commodity price cycle — and for revenue diversification, including processing fees (tolling) that are independent of spot metal prices, and forward contracts that lock in some output value.

Despite near-term price headwinds, the structural long-term case is strong. Recovered materials cost 30–50% less than primary equivalents in typical market conditions, and the IEA projects recycling will supply 10–15% of lithium demand by 2030. As volumes grow and processes scale, unit costs fall and the economics strengthen. Recycling is not yet a mature, stable industry — but its trajectory is clearly upward, driven by regulation, supply chain imperatives, and the sheer physics of a market producing hundreds of gigawatt-hours of batteries per year that will eventually need to come back.

References

Van Hoof, G.; Robertz, B.; Verrecht, B., Towards Sustainable Battery Recycling: A Carbon Footprint Comparison between Pyrometallurgical and Hydrometallurgical Battery Recycling Flowsheets. Metals 2023, 13, 1915
Un-Hyuck Kim, Liang-Yin Kuo, Payam Kaghazchi, Chong S. Yoon, and Yang-Kook Sun, Quaternary Layered Ni-Rich NCMA Cathode for Lithium-Ion Batteries, ACS Energy Letters, 2019 4 (2), 576-582
Sheng S. Zhang, Problems and their origins of Ni-rich layered oxide cathode materials, Energy Storage Materials, Volume 24, 2020, Pages 247-254
Mesfin A. Kebede, Ni-rich LiNi_xCo_yM_1-x-yO₂ (NCM; M=Mn, Al) cathode materials for lithium-ion batteries: Challenges, mitigation strategies, and perspectives, Current Opinion in Electrochemistry, Volume 39, 2023
Christian M Julien, Alain Mauger. NCA, NCM811, and the Route to Ni-Richer Lithium-Ion Batteries. Energies, 2020, 13 (23), pp.6363.
Qu J, Xie Z, Bicket IC, Yuan H, Zuin L, Andelic M, Qu W, Botton GA, Liu H. Insights into Fast-Charge-Induced Cracking and Bulk Structural Deterioration of Ni-Rich Layered Cathodes for Lithium-Ion Batteries. ACS Nano. 2025 Sep 23;19(37):33202-33211.
Case Study: LG Energy Solution – Advancing NCMA Cathodes for Long-Range Electric Vehicles, LG Energy Solution, LinkedIn
Traditional vs. Advanced Green Recycling Methods for Batteries, Green Li-ion
Recycling of Critical Minerals, IEA

See also: Recycling Process Engineering, Recycle