As numerous EV execs have told Charged in recent months, the “buy American” provisions of the IRA and BIL are driving massive investments in domestic mining and processing for EV battery raw materials. Now a similar gold rush appears to be gathering speed in the battery recycling field.
The voluminous Inflation Reduction Act includes a clause that defines EV battery materials recycled in the US as American-made, regardless of their origin—so EVs made with US-recycled battery materials should be eligible for the IRA’s purchase incentives.
Reuters recently interviewed more than a dozen EV industry insiders, who said that the IRA’s recycling provisions are spurring a US factory building boom, as well as encouraging automakers to accelerate their research into battery recycling. There are at least 80 companies involved in EV recycling around the world, and some 50 startups have attracted over $2.7 billion in investment in the last six years.
BMW Sustainability Chief Thomas Becker told Reuters that the minerals in a typical EV battery—primarily lithium, cobalt and nickel—are worth somewhere between $1,100 and $2,200. (So much for the oft-repeated and long-rebutted trope that EV batteries will end up in landfills.)
Demand for these materials is bound to grow as automakers ramp up EV production, but they can theoretically be recycled an infinite number of times.
JB Straubel, the CEO of Redwood Materials, has long recognized the importance of building a closed-loop circular supply chain. Straubel famously said that “the largest lithium mine could be in the junk drawers of America,” by which he meant that not only EVs, but consumer products, could be a source of recycled materials. Redwood and others also process a good deal of raw materials recovered from scrap discarded in the battery-making process.
A host of companies are building recycling facilities in the US and Europe (Ascend Elements, Li-Cycle, Altilium Metals). However, the vast majority of recycling currently takes place in China—Reuters reports that there is “little existing US recycling capacity today, and virtually none in Europe.” And the Chinese aren’t waiting around for others to catch up—the country recently announced more stringent recycling standards and increased support for research.