Battery Recycling Is Not Very Profitable

Battery recycling is currently not very profitable due to the lower value of metals in certain battery chemistries and overcapacity in recycling facilities. While the industry faces economic challenges, government policies in the US, Europe, and China are driving increased battery recycling requirements and support, potentially leading to future profitability and sustainability improvements.

Battery Chemistry & Metal Value

• 00:00:09 Unlike traditional recycling of metals like steel and aluminum, battery recycling faces challenges due to the varying value of metals depending on battery chemistry. LFP batteries, now more common, contain less valuable metals than older NMC batteries, diminishing the value of recycled materials. This shift has significantly impacted the economics of the recycling process, making it less profitable compared to recycling other materials.

Recycling Capacity & Government Policies

• 00:01:02 The battery recycling industry currently suffers from excess capacity, as the volume of end-of-life batteries does not yet meet the available recycling infrastructure. However, government regulations are being implemented to promote and mandate battery recycling. The Inflation Reduction Act in the US, new EU regulations by 2026, and existing Chinese legislation aim to increase the recycling rate and create more sustainable battery supply chains, potentially driving future profitability.