Recycling Revolution: Turning EV Junk into Green Gold
Kotak Insights | Date 28/09/2024
Remember how our Nanis would store their prized possessions in big, dusty old trunks? They would collect old sarees, jewellery, and even those huge vintage utensils. They had a knack for holding onto things, believing that every piece had its moment of value, even if we couldn’t see it right away.
And then, years later, when we finally decided to clean out those trunks, we often stumbled upon these hidden treasures—beautiful sarees we could repurpose or a stunning piece of jewellery that had been forgotten. It was like uncovering a little bit of history and value that had been waiting patiently for us.
Well, we see a similar situation with electric vehicle (EV) batteries today. While EVs might clean up our roads, a growing mess lurks under the hood: the mountain of waste from used EV batteries.
With lithium-ion batteries powering the EV revolution, their disposal has sparked new problems. What happens when these batteries hit the end of the road?
Their waste keeps piling up, and it’s no small deal. But, here's where things get interesting: what if this waste could actually be turned into a goldmine? Recycling could be the key to solving the mess and unlocking some severe business potential.
The EV Battery Waste Problem
Lithium-ion batteries are the powerhouses behind EVs, packed with valuable materials like lithium, cobalt, nickel, and manganese.
They’re the key to EV performance, but here’s the kicker—they don’t last forever. Once a battery drops to 70-80% of its original power, it’s game over for your car. And that’s where the waste problem starts to pile up.
India is working hard to become self-reliant in terms of batteries, locking down overseas lithium mines, and building up its own supply chains.
In June this year, it joined the Minerals Security Partnership of the Critical Mineral Club to catalyse investments from foreign governments and the private sector in the critical mineral supply and value chain.
But here’s the thing—it’s not just about digging up new stuff. There’s a goldmine of materials already locked inside used batteries. If we can crack the code on recycling, we can keep these materials in play almost forever. Extract, separate, recycle, and boom—those same metals are back in the game, ready to power new batteries.
The global EV scene is exploding, and by 2030, the demand for EV batteries is set to hit a massive 5-terawatt hour (TWh) annually. That’s a lot of batteries—and, eventually, a ton of waste.
The International Council on Clean Transportation says 1.2 million (m) EV batteries will be toast by 2030, and by 2050? Brace yourself for 50 m dead batteries! If we don’t get a grip on recycling, we’re looking at a mountain of waste causing pollution, environmental damage, and health risks.
But here’s the kicker—when we toss these batteries out, we’re throwing away valuable stuff. Lithium, cobalt, and nickel aren’t endless, and as more EVs hit the streets, the demand for these critical minerals is shooting through the roof.
In 2021, cobalt prices jumped 41%, lithium 48%, and nickel 37%. This price volatility, coupled with the scarcity of resources, further underscores the importance of recycling, making it more important than ever.
Recycling: A Solution to Cut Down Waste and Reduce Dependency
Recycling EV batteries has emerged as a critical strategy for reducing waste and dependency on virgin raw materials.
Studies have shown that the valuable materials inside lithium-ion batteries, such as lithium, cobalt, and nickel, can be used almost endlessly when extracted and recycled correctly.
This approach delivers a two-fold win: it helps manage the environmental hazards of battery disposal while reducing the pressure on sourcing critical minerals.
Recycling could significantly reduce the need for new mining. If 50% of end-of-life EV batteries are recycled, the demand for newly mined lithium, cobalt, nickel, and manganese could decrease by 3% in 2030 and drop down to as much as 28% by 2050.
This reduction would not only alleviate mining's environmental impact but also offer a more stable and cost-effective supply of materials for battery production.
India's Recycling Roadblocks
India faces a tough challenge when it comes to recycling lithium-ion (Li-ion) batteries. These powerhouses that drive electric vehicles (EVs) contain only about 2% lithium, making it difficult to extract this precious metal from other materials in recycling.
Lithium is highly flammable when exposed to moisture and air, meaning the extraction must happen in climate-controlled chambers to avoid potential hazards.
The recycling process itself isn’t simple. First, the battery cells are discharged, crushed, and shredded. This produces a "black mass," which holds valuable metals like lithium, cobalt, and nickel.
Through complex chemical processes, these metals are separated and refined into battery-grade materials, ready to be used again in the production of new anodes and cathodes. This closes the loop in the battery supply chain and creates a circular economy.
Recycling lithium-ion batteries is an expensive business. Setting up a full-fledged recycling facility can cost anywhere between Rs 100-300 crore, and the entire process of testing, grading, and refining these materials is labour-intensive and costly.
This makes scaling up a major hurdle for companies entering the recycling game.
To make matters worse, India currently lacks a detailed framework for safely handling, storing, and transporting lithium-ion battery waste. It's a global issue, with many countries still grappling with managing the growing wave of EV battery disposal.
The real challenge is to take promising research and development (R&D) breakthroughs and turn them into scalable, industrial-level recycling processes.
Recycling Opportunity
India's push toward becoming carbon neutral by 2070 has opened up a massive opportunity for battery reuse and recycling, especially as the electric vehicle (EV) market expands.
According to estimates from the National Institution for Transforming India (NITI) Aayog, the country will generate a staggering 128 GWh of recyclable battery volume by 2030. Remarkably, around 46% of this volume will come directly from EVs.
This presents a significant opportunity for India to develop its recycling infrastructure, as the sheer volume of spent batteries will need proper treatment.
However, to meet this demand, India's current lithium battery recycling capacity, currently at only 2 GWh, will need to expand nearly 60 times over the next eight years.
This represents both a challenge and an opportunity for the country to establish itself as a global leader in battery recycling.
Top Indian EV Recycling Stocks
With the imminent surge in demand for battery recycling, several Indian companies are racing to establish themselves in this emerging sector.
The market is still relatively nascent today, but a wave of new players is positioning themselves to capture market share before the industry skyrockets by the end of the decade.
India’s recycling ecosystem is buzzing with activity. It boasts a dynamic mix of startups, established e-waste recyclers expanding their horizons, and companies focused on critical battery materials.
Key players in the listed space include Gravita India, Tata Chemicals, Exide Industries, Amara Raja Energy & Mobility, Pondy Oxides & Chemicals, and NILE. These firms are stepping up their efforts in EV battery recycling.
Meanwhile, the startup scene is equally vibrant. Companies like Attero, Exigo Recycling, Lohum, LICO Materials, Ziptra, Batx, and SungEel Hitech are pioneering innovative approaches to battery recycling, aiming to transform the industry with cutting-edge technologies and practices.
As this sector gears up for explosive growth, both established firms and emerging startups will play pivotal roles in shaping the future of battery recycling in India.
Wrapping It Up
India’s recycling game is about to level up. The new Battery Waste Management Rules set ambitious recycling targets for 2026 and a goal to reuse a chunk of spent batteries in new ones by 2030, so the country is gearing up for a major transformation.
Government-backed initiatives like the Production-Linked Incentive (PLI) scheme and battery swapping policies are turbocharging efforts to make battery manufacturing and recycling more sustainable.
The National Mission on Transformative Mobility and Battery Storage is driving innovation, pushing the envelope on battery tech and recycling processes. The Central Pollution Control Board is rolling out a pilot project to collect and recycle spent EV batteries, partnering with industry leaders to get the ball rolling.
For businesses looking to ride this wave, the opportunities are practically gold-plated. As India ramps up its recycling infrastructure and sharpens its battery waste strategies, companies at the forefront of this revolution can cash in on the surge for recycled materials and cutting-edge solutions.
However, as always, smart moves are key. Research your picks, assess the risks, and stay ahead in this high-stakes energy revolution.
Happy learning!
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