EV makers are looking to circular batteries to secure scarce inputs while delivering on green commitments.
In 2019, JB Straubel left his role as Tesla’s chief tech officer to venture into the recycling business.
His new field was not far distant from the one he left behind. Straubel’s new company is Redwood Materials, which recycles EV batteries. Under his vision, the EV and the EV battery recycling industry should ideally be one and the same.
“I think this entire new sustainable economy as we’re envisioning it, with everything electrified, simply can’t work unless you have a closed loop for the raw materials”, he explains.
In 2019, Tesla itself moved into the EV battery recycling space, setting up an in-house system where it had previously outsourced to third-party recyclers. The nickel recovered by Tesla in 2021 was worth more than $45 million a year later.
Battery recycling and Net Zero
Transport has the highest reliance on fossil fuels of any sector, contributing 37% of carbon dioxide emissions from end-use in 2021 at 7.7 Gigatons. Reducing this 20 % within the next eight years will be essential to meeting Net Zero goals.
However, decarbonizing transport will require a massive expansion in the global metals supply. A typical EV battery with a 60 kilowatt per hour capacity contains graphite (52 kg at 28.1%), then aluminum (18.90%), then nickel (15.7%), Next are copper and steel (10.8%), manganese (10 kg, 5.4%), lithium (6 kg, 3.2%), cobalt (4.3% at 8kg), then iron at 2.7%.
The International Energy Agency thinks that to reach the goals of the Paris Agreement – net zero by 2040 -the world will need to quadruple minerals for clean energy technologies. In other words, the IEA believes we need a 300% increase in critical metals supply.
Two challenges: Sourcing and waste
The problem of securing a stable supply of critical metals is not confined to EVs. Generally, all non-fossil technologies – including things like solar panels – are more metals and minerals-hungry than their fossil fuel counterparts. Some think that the 21st century will see a metals scramble to mirror the oil conflicts of the 20th.
Remember that on top of meeting the needs of the renewable tech sector, some of these elements (like aluminium and chrome) will still be in demand from established industries like construction and computing.
To give an idea of the difficulties ahead, compare the IEA’s 300% metals ramp-up estimate to the comparatively paltry 72% jump in global oil production between 1971 and 2020.
Further, only a few countries hold accessible reserves of these critical metals. These sources also vary in their purity and extraction costs. Prices and volumes for these elements are also highly dependent on trade relations between importer and exporter nations.
As if securing a reliable supply of these elements were not already a challenge, EV waste looms as one of the biggest environmental threats posed by an electrified, post-carbon world.
Forecast EV industry demand of lithium will be 358, 000 metric tons by 2040 but manufacturers can so far only guarantee a 7- or 8-year lifetime for most batteries. At this rate, the EV boom will usher in a rapid pile up of waste.
Circular battery production
One way to tackle sourcing and waste problem simultaneously is to recycle valuable metals from used batteries.
EV companies are already exploring circular business models that use recycled metals as its inputs. This is motivated by a desire to secure stable raw materials supply, many of which today rely on fragile trading partnerships that could falter along geopolitical faultlines.
Some EV manufacturers are doing just as Tesla did in 2019 – bringing their battery recycling systems in-house. Volkswagen has a pilot line for recycling its own batteries situated next to their cell development pilot line.
Others are reaching out to industry partners. In 2018, BMW formed a joint technology consortium with battery maker Northvolt and Umicore to establish a closed-loop life cycle. Technical expertise is also provided by battery recycling specialist Duesenfeld. Back in 2020, the company set a target of recycling 96% of its EV batteries.
Some are taking the outsourcing route: Renault sells its returned lithium batteries to service providers Connected Energy and Powervault.
Public EVs: Heavy duty battery recycling
Any technical and regulatory innovations in battery recycling, however, will not deliver on environmental targets unless we also drastically reduce growth in demand for private cars.
The rate of private car ownership right now is unsustainable – with or without component recycling. From 1960 to 2020, the percentage of US households with three or more vehicles shot up from less than 5% to 82%. If we see similar growth in China or India, we will see a billion additional cars in either country alone, comparable to today’s global fleet – 99 % of which are not electric.
Any hope of managing natural resources sustainably will depend on de-emphasizing private mobility and shifting to efficient, low-cost public transportation. This will mean recycling batteries used in public transport EVs. This comes with its own demands: heavier vehicles mean larger batteries.
A pilot scheme in the Netherlands named Project Anubis has been repurposing old batteries from public transportation EVs as grid power plant batteries. The project takes intensively used batteries from 43 VDL Bus & Coach electric buses that have been in operation since 2016 and consolidates them into one 7.5-megawatt battery for an RWE power plant in Moerdijk.
Targets and incentives still absent
There are currently few scaling incentives for battery recycling internal to the market. Barriers include the small quantities of battery materials to recycle, lack of technological development in recycling processes, and the still-low cost of virgin raw inputs.
Currently, the recycling rate for EV batteries is only 5 % globally. In many countries, however, there is already a dormant value chain in the making. Research by Green Alliance for example found in 2019 that UK small electric var and van fleet contained over 1, 400 tonnes of lithium and 800 tonnes of cobalt worth £26.6 million and £31 million respectively – enough to make 220, 000 electric cars.
To push up battery recycling rates, the industry needs incentives and support. One concrete mechanism is something called a battery value guarantee. This would give every EV battery with an end-of-life market price and a legal owner, likely the auto manufacturers, battery recyclers, or second life storage facilities. This would give manufacturers a clearer view on end-of-life battery value. It also grants the consumer a firmer figure on how much their vehicle is likely to depreciate.
With UK public procurement almost coming to £300bn each year, it is clear that contracting authorities across the world have the power and resources to shape the direction of sustainable production.
Already, we have seen government subsidies stimulate light private EV purchase during the pandemic. China currently leads in deploying heavy duty public transport EVs, handing out subsidies through purchase price reduction per kilowatt hour of battery capacity modified for bus and truck size.
Another idea is to issue digital passports for every battery produced and used so that track each item throughout its life cycle, giving recyclers and manufacturers have an accurate handle on the supply of raw materials that can enter the recycling sector.
There are also currently few targets on battery recycling, meaning that any voluntary corporate initiatives are running blind and unlikely to deliver on environmental outcomes fast enough.
This may be changing in the EU after a December 2022 law on battery sustainability was passed. From 2024, battery makers selling in Europe will have to report the product’s total carbon footprint, from mining through to recycling. That data will inform a maximum CO2 limit for batteries to come into effect as early as July 2027.
At some point, of course, the market will tip in favour of circularity – the costs of virgin metals will rise as the EV industry grows. With manufacturers starting to invest in recycling for long-term supply security, now is the time for governments to throw their weight behind this emerging industry and make sure that cost efficiency does not come too late.