Electric Vehicle Battery Recycling to Hit $2 billion by 2016

New research from Frost and Sullivan has found that Electric Vehicle battery recycling will become significant by 2016 as greater numbers of EVs reach end-of-life.

25 February 2011

New research conducted by analysts at Frost and Sullivan has found that Electric Vehicle (EV) battery recycling will become significant by 2016, as greater numbers of EVs reach end-of-life.

According to the report, there is currently little economic sense in recycling lithium-ion (Li-ion) batteries as they contain only a small fraction of lithium carbonate as a percentage of weight and are inexpensive compared to cobalt or nickel.

However, the report claims that electric vehicles are to live up to the 'green' tag in the long term, the recycling and reuse of the battery packs will help ensure that the energy source is in a closed loop and complete a full lifecycle.

The report - Global Electric Vehicles Lithium-ion Battery Second Life and Recycling Market Analysis - states that EV Li-ion battery recycling market is expected to be worth more than $2 billion by 2022, with more than half a million end-of-life EVs' battery packs becoming available for recycling through the waste stream.

"Although lithium currently costs less than other raw materials needed for manufacturing a battery, there is an inherent risk due to its availability being dependent on a small geographic area," notes Frost & Sullivan Industry Analyst Aswin Kumar. "Almost 70% of lithium deposits are in South America."

For second life applications, the report notes that Li-ion batteries will have to compete with the dedicated batteries used for current second-life applications, such as stationary grid storage.

They will have to compete in terms of cost, power and energy storage, as most of the characteristics of Li-ion batteries with regard to their degradation at reuse are still uncertain.

Although lithium is 100% recyclable, according to the report battery-grade lithium from the recycling process is costlier than lithium from direct sources.

"The cost of batteries, which is the main hindrance for EV adoption, can be lowered through reuse or second life applications," remarks Kumar.

"Furthermore, with the rapid increase in the adoption of portable consumer electronic goods and their associated rechargeable lithium-ion batteries, battery recycling can reduce reliance on import or production of lithium," he adds.

align="left" hspace="5" vspace="1">Frost and Sullivan say that a lack of price incentives and legislation restricts lithium recycling, and there are only limited incentives for utilities using energy storage, thus hindering reuse activities.

Furthermore, apart from the cobalt or nickel found in existing battery packs, only a few valuable metals with the potential to be used in batteries are under research and development.

Low-value elements like iron and phosphorous, currently under research, will pose a greater challenge to creating a profitable recycling program without additional incentives or the addition of more valuable lithium.

The lack of valuable materials in batteries often limits the potential for recycling states the report.

The advent of Li-ion batteries is expected to spur the automotive and utility industries to sell a common fuel - electricity - to consumers. Furthermore, with second life applications, Li-ion batteries are poised to contribute to a further net reduction in emissions beyond that achieved by using an EV.

"Lithium is a finite resource like coal or oil and the metal alone should not be the future source of power for automotives," cautions Kumar. "Research and development on other sources of power is needed to overcome the dependency on lithium and to meet the future challenges on demands, foreign relations and environment."