- Tram Ho
The fact that many companies globally are rushing to recycle electric vehicle batteries is good news for automakers concerned about future shortages of raw materials. However, the wave of new recycling plants sprouting up so quickly left the industry itself with a major problem: not enough scrap to produce new recycled batteries.
According to Bloomberg, car giants and many professional recycling and mining companies, including Glencore, are pouring money into recycling batteries for the electric vehicle revolution. As a result, global battery recycling capacity is expected to increase nearly tenfold between 2021 and 2025, possibly even surpassing the available scrap supply this year, according to the Storage Energy Circular.
The shortage will therefore continue for the next decade, as the battery recycling industry waits for new electric vehicles to arrive. Of course, old batteries will eventually be put to use, but until then, recycling companies will still struggle to survive.
Concerns around future supply have pushed prices of a range of raw materials to skyrocket in recent months, with lithium prices more than quadrupling in the Chinese market. This upward trend is expected to continue, in the context of the electricity crisis caused by the drought showing no signs of cooling down.
For European carmakers, there is an urgent need to build factories before regulations force them to use more recycled materials when making electric vehicle batteries, starting in 2030. Independent recyclers also need to scale up further and collecting raw materials can still be profitable. However, it is all happening too fast.
According to Hans Eric Melin, founder of Circular Energy Storage, “ Everyone seems to think that there is a lot of scrap and expired batteries. But when we look at actual capacity, we know that’s not the case .”
Electric vehicle batteries are often recycled from old batteries that are already expired or waste materials from battery factories. However, most EVs today are still running fine, and even when they run out of value, the batteries will be sold for reuse. Meanwhile, battery manufacturers are also gradually cutting waste at factories and making it difficult for recyclers to find many raw materials.
According to new research by Benchmark Mineral Intelligence, by 2025, 78% of the available scrap supply will come from manufacturing waste, of which, expired batteries account for 22%. Experts predict that it will not be until the end of the 2030s, when this industry will operate stably again, when the amount of used batteries begins to increase.
In the past, most investment has gone to China, which accounts for more than 80% of the world’s battery recycling capacity. This is also the place where it is expected to welcome the first big wave of scrap, in the context of more and more EVs on the market. Plans are also in place for new recycling facilities across Europe and North America, but these plants will take a long time to stabilize.
“ China will dominate the scrap supply. The market is still quite lackluster for now, but most of the capacity will come from China. Here, the available scrap volume will also be higher ,” said Benchmark analyst Sarah Colbourn.
To recycle used batteries, they must first be removed from the electric vehicle and chopped into black debris. The black flakes are then processed to form a specialized chemical used in new electric vehicle batteries.
According to Ajay Kochhar, CEO and co-founder of recycling startup Li-Cycle Holdings, the rapid growth of the recycling industry has attracted the attention of short sellers, who are skeptical of the idea. technology and development costs. Even so, mining giant Glencore this year still poured $200 million into Li-Cycle Holdings.
Kunal Sinha, Glencore’s global head of recycling, said Glencore invested in Li-Cycle because it recognized its long-term prospects. However, the next few years will be quite difficult.
“ Supply is not an issue for us. We have more batteries than processing capacity. The question now, is how will that help the growth of the industry as a whole ,” said Kochhar.
“ If you are building a battery-dependent recycling business, your business is probably under a lot of pressure. This business model is difficult to succeed because people have to wait until the scrap arrives ,” Sinha said in an interview in London.
If there is a shortage of raw materials, Li-Cycle and Glencore can fill their own supply thanks to Glencore’s support until the amount of expired batteries increases in earnest.
According to Bloomberg, even if an electric vehicle breaks down, people are still willing to spend thousands of dollars to buy back EV batteries, then install them into similar vehicles or systems. This causes an old battery to take at least 15 years to reach recycling plants, and in some cases, up to 25 years.
In the short term, recyclers will have to depend on the scrap generated in the battery manufacturing process. However, even this supply is under pressure, when recently, many experts had to lower their long-term forecast for the total volume of scrap generated in the production process.
However, this shortage is not expected to last forever. According to Benchmark, recycled battery products will still contribute less than 10% of the global supply in 2030, then increase significantly over the next decade. Even so, automakers still have to rely heavily on mining companies to lay the foundation for the explosive growth of the electric vehicle industry.
“ The scale in demand is amazing and mining needs attention. We will certainly still face a deficit and recycled batteries will not be able to fill that gap anytime soon, ” said Benchmark’s Colbourn.
By: Bloomberg, CNBC
Source : Genk