Global Companies Joining the Fray
As the electric vehicle market grows rapidly, used batteries are attracting as much attention as electric vehicles. Global companies are entering the business of extracting rare metals such as lithium, nickel, and cobalt from waste batteries for production of new batteries.
According to market research firm SNE Research on Feb. 27, the number of electric vehicles (BEVs + PHEVs) scrapped around the world is expected to rise from 540,000 in 2025 to 46.36 million in 2040. Battery waste from these electric vehicles is projected to increase more than 80 times from 42GWh in 2025 to 3,455GWh in 2040.
The battery recycling market is expected to grow from 26GWh in 2025 to 1,606GWh in 2040. In terms of monetary value, it will increase from 6 trillion won in 2025 to 66 trillion won in 2040, analysts say.
As the battery recycling market is just burgeoning, it has no absolute powerhouse yet, so global companies are jumping into it.
SK Group is the most active player in the battery recycling market among Korean companies. It has chosen the waste battery recycling business as a major growth driver.
SK Innovation has started a test operation of a battery metal recycling (BMR) demonstration plant, which was completed in Daejeon in 2021. The company is expected to generate about 300 billion won in earnings before interest, taxes, depreciation and amortization (EBITDA) by recycling batteries of 30GWh annually in 2025.
SK Innovation developed its own lithium hydroxide extraction technology and has applied for 54 patents. Extracting lithium, nickel and cobalt from battery waste has already been commercialized, but there had been no technology to recover lithium in the form of high-purity lithium hydroxide. SK Innovation’s technology is expected to allow more high-purity nickel and cobalt to be extracted.
LG Energy Solution also signed a contract to recycle waste batteries with Li-Cycle, a North American battery recycling company, through Ultium Cells, its joint venture with GM, a U.S. automaker, in 2021. It is also cooperating with other companies to recycle waste batteries in the Ochang plant in North Chungcheong Province, Korea and a plant in Poland.
Samsung SDI made an equity investment in PMGROW, a waste battery recycling company.
POSCO HY Clean Metal is a corporation jointly established by POSCO and China’s Huayou Cobalt 65-35 in May in 2021. The company is building a battery recycling production line by investing 120 billion won. The goal is to complete it in July in 2022. POSCO HY Clean Metal plans to secure an annual production capacity of 2200 tons of nickel, 700 tons of cobalt, 600 tons of manganese, and 2100 tons of lithium carbonate. Next to it is POSCO Chemical’s cathode materials plant. Thus, POSCO HY Clean Metal’s plant is expected to reduce processing costs by directly supplying raw materials to POSCO Chemical.
China which has emerged as the world’s largest electric vehicle market is also focusing on treating waste batteries. China’s CATL, the world’s largest battery company, announced in 2021 that it will spend about 6 trillion won to establish a battery recycling facility in Hubei Province, China. German automobile parts maker ZF Group and German chemical company BASF also signed partnership agreements to recycle waste batteries.
Another Chinese battery company, BYD, set up about 40 waste battery recovery bases across China. Gem, a Chinese battery recovery and processing company, established the largest waste battery recovery and processing production line in China and has signed a memorandum of understanding (MOU) with more than 200 carmakers. The Chinese government is also strengthening its management and supervision of waste battery treatment.
The United States does not have many battery production bases yet. Large volume of batteries is imported to the United States from Korea and China. However, as the waste battery market grows rapidly, it is responding quickly. A leading company is Li-Cycle, a Canadian company and the largest lithium-ion battery recycling company in North America. Li-Cycle, which also signed cooperation with LG Energy Solutions, began the construction of a factory worth about US$175 million in Rochester, New York, at the end of in 2021 with the aim of operating it beginning from 2023. When completed, it will become the largest lithium-ion battery recycling hub in North America.
Founded by Tesla co-founder J. B. Straubel, Redwood Materials is also expanding its battery recycling business with the aim of establishing a circular supply chain for batteries. The company plans to spend about US$1 billion to build a new factory. Recently, it has decided to cooperate with Ford and Volvo and establish a waste battery classification and recovery supply chain.