Lithium-ion (Li-ion) batteries are used ubiquitously in daily life, and the demand for Li-ion batteries has continued to increase over the last decade, including in consumer electronics and portable devices, electric vehicles (EVs), and stationary energy storage systems. EVs have been responsible for most of this growth and is now the sector responsible for the largest percentage of total global Li-ion battery demand, with IDTechEx forecasting the market for EV batteries to exceed US$380 billion by 2034.  

As the demand for Li-ion batteries increases, so does the need to manage their sustainability throughout their entire lifecycle, including raw material extraction and processing, battery use or reuse and, importantly, at end-of-life (EOL). Some of these factors have also been a driving force behind the development of alternative energy storage technologies, in particular, in reducing the chance of supply bottlenecks to materials such as lithium, cobalt, and nickel. Na-ion batteries, for example, can offer relatively similar performance characteristics to Li-ion without the use of lithium or cobalt. Alternatively, redox flow batteries can make use of cheaper and more widely available materials such as zinc, iron, or organic compounds, though the majority of deployments are based on vanadium electrolytes. However, while technologies such as these can diversify material demand to more widely available and potentially less environmentally problematic ones, Li-ion demand is forecast to continue growing at a rapid pace. As such, Li-ion material supply and EOL management will remain critical. Find out more on IDTechEx's latest research on Na-ion, RFBs, and alternative storage technologies at www.IDTechEx.com/Energy.

Li-ion at end-of-life

Once a Li-ion battery has reached the end of its first life, several options can be considered. These include disposal, recycling, or repurposing for second-life applications. Disposing of Li-ion batteries could result in the leaking of flammable and hazardous electrolyte into the environment and would waste the potential remaining value or materials contained within the battery. Repurposing (or remanufacturing) batteries for second-life applications typically sees Li-ion batteries from EVs being reused in stationary energy storage applications. This looks to maximize the value of the battery by using it in another less demanding application. Recycling Li-ion batteries looks to recover valuable materials, which either form part of the cell or other components of the battery pack. Recycling will be important for battery manufacturers looking to mitigate against potential future raw material supply constraints, fluctuating raw material prices, and to domesticate material supply.

Li-ion battery recycling

Li-ion battery recycling typically sees recyclers extracting materials such as lithium, cobalt, nickel, manganese, copper, and aluminum. The technologies used in Li-ion battery recycling are typically a combination of mechanical, hydrometallurgical or pyrometallurgical processing steps. Mechanical processing is employed prior to hydrometallurgical processing. Once a recycler receives a battery pack, this would require disassembling to obtain the individual Li-ion cells. These can then be mechanically crushed, forming powder known as black mass. Hydrometallurgical processing uses chemical reagents to selectively extract the valuable metals in the black mass, producing battery-grade metal salts (e.g., lithium carbonate, cobalt sulfate). These can then be processed further to manufacture precursor for cathode active material for new batteries. This is considerably cheaper than manufacturing new cathodes from virgin materials, and several life cycle analyses in the literature suggest that, in most cases, this causes less environmental impact too. Pyrometallurgical processing typically occurs in a shaft furnace and is a high-energy process that produces a mixed metal alloy, as well as a slag stream typically containing lithium, manganese, and aluminum. These intermediaries would require further hydrometallurgical processing if all valuable metals were to be recovered.

IDTechEx predicts that hydrometallurgy will be the key technology adopted by most recyclers globally, primarily due to its higher efficiency and lower energy requirements compared to pyrometallurgy (see below figure). However, hydrometallurgical recycling requires pack disassembly and mechanical pre-treatment, so recyclers looking to scale their recycling capacities for a full Li-ion recycling process would need to scale both mechanical and hydrometallurgical capacities. As seen in IDTechEx's 'Li-ion Battery Recycling Market 2023–2043' report, some players have chosen to adopt 'Spoke and Hub' models, where spokes are facilities purely focused on disassembly and mechanical processing, and where hubs take the black mass produced at spoke facilities and use this to produce battery grade salts.

Regulations will also start to drive Li-ion battery recycling in key regions such as the EU, India, and China. The EU Battery regulation includes targets for light means of transport (LMT) and portable battery collection rates, as well as specific material recovery efficiency targets for all Li-ion batteries, and minimum recycled contents targets in new EV and industrial batteries. India introduced its 'Battery Waste Management Rules 2022', covering EV, portable and industrial batteries with similar targets. The EU Battery Regulation targets are summarized below.

Second-life batteries

There may be instances when a battery has reached the end of its first life and is no longer be able to meet the demands of an EV. EOL is typically defined as the point where a battery falls below a certain failure threshold. The consensus in the industry, especially for EV batteries, is that this is when the maximum battery capacity falls to 70-80% of its rated value. However, such a battery could still be used in a less demanding stationary energy storage application, and at a lower cost than a new Li-ion stationary storage system. Critically, however, this involves testing the retired battery to ensure it is still fit for reuse, and also deciding whether cell-level disassembly is worthwhile. Key tests for assessing the suitability of batteries for second-life applications include State-of-Health and internal impedance tests. Generally, those batteries with a 70-80% State-of-Health will still be suitable for second-life applications.

Battery pack designs differ between original equipment manufacturers (OEMs), and automating such a process is difficult. Therefore, manual labor is needed to disassemble EV battery packs, and this workforce will need to be reasonably skilled to disassemble packs of different designs safely. Moreover, disassembling to cell-level takes longer and therefore increases manual labor costs. These reasons therefore see the majority of second-life battery startups, scattered across Europe and North America, currently integrating EV batteries at pack-level for second-life applications. Multiple packs can be strung in parallel to create a kWh-MWh-sized stationary storage system. As suggested by research in IDTechEx's report 'Second-life Electric Vehicle Batteries 2023–2033', currently, a large portion of second-life batteries likely reside in China, where they are used for providing backup energy for telecom (4G, 5G) towers.

While repurposing at pack-level reduces costs, the performance of the pack will be limited by the weakest-performing cell. These repurposers will, therefore, be leaning more-so on battery analytics tools and software to closely monitor the performance of these batteries and may have conditions in place with customers that promise faulty battery replacement. As no modifications will be made to the cell arrangement, repurposers would have to ensure that procured batteries are provided to them by an automotive OEM at certain performance specifications. This could be at minimum State-of-Health (SOH) or internal impedance. This relies on partnerships between both automotive OEMs and repurposers to manage this supply of high-quality batteries while still dealing with batteries that do not meet these minimum specifications.

To recycle or repurpose batteries for second-life applications?

Repurposing EV batteries for second-life applications is arguably a more technically demanding operation that relies more on manual labor and with less predictable economics. While pack-level integration reduces remanufacturing costs, it relies more on repurposers using the best-performing batteries they are supplied with and monitoring the performance of these batteries closely over their second life. Crucially, repurposing does not replace recycling but simply delays it and maximizes the value of the battery.

Policies will drive Li-ion battery recycling in some key regions, alongside battery manufacturers looking to domesticate material supply and to shield themselves against supply constraints and fluctuating prices of virgin materials. An important factor to consider is which chemistries are better suited for recycling or repurposing. From a material value perspective, LCO, NMC and NCA chemistries propose much stronger economic value propositions for recycling than LFP.

Whether to repurpose Li-ion batteries for second-life applications or recycle them depends on several factors. LCO batteries are valuable, given the high content of cobalt, but are difficult to collect on a wide scale as consumers have little incentive to do this. NMC and NCA batteries also have high embedded value and are, therefore, more likely to be recycled. LFP batteries are less valuable, and battery manufacturers may incur a gate fee to cover the costs of recycling. This, alongside LFP batteries generally exhibiting a longer cycle life and being inherently safer than NMC/NCA batteries, suggests it will be more likely that LFP batteries will be repurposed for second-life applications. Therefore, whether a Li-ion battery is recycled or repurposed depends on the battery source, chemistry, potential policies, materials prices, and any developments in recycling and repurposing processes that could improve the outlook for either of these routes. Given the high value embedded within NMC and NCA batteries and the nascent stage of the second-life market, the recycling market is expected to grow at a faster rate. Nevertheless, both second-life Li-ion batteries and recycling are expected to play an important role in managing end-of-first-life Li-ion batteries over the coming years. For more information on the Li-ion battery recycling market, please visit www.IDTechEx.com/LIRecycling.

For further research on energy storage please see www.IDTechEx.com/Research/ES, and more research on sustainability is available at www.IDTechEx.com/Research/Sustainability. IDTechEx also offer access to the full portfolio of energy and sustainability related research through bespoke subscription services – visit www.IDTechEx.com/Energy to find out more.

This article is from "Technology Innovations Outlook 2024-2034", a complimentary magazine of analyst-written articles by IDTechEx providing insights into a number of areas of technology innovation, assessing the landscape now and giving you the outlook for the next decade. You can read the magazine in full at www.IDTechEx.com/Magazine.

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