The electric vehicle battery recycling market size was valued at USD 8.20 billion in 2022 and is expected to reach USD 20.06 billion by 2028, growing at a CAGR of 16.08% during the forecast period. The market growth is primarily driven by the stringent government regulatory framework, strengthening demand for electric vehicles (EVs), and rising concerns regarding the depletion of materials. Additionally, the surging government incentives for battery recycling and growing innovations in recycling technologies are expected to create market growth opportunities. The EV batteries recycling market is externally shaped based on the process and technology available in the market. With considerable upgrades in business models and operation techniques, the market can witness further traction supported by stringent protocols and corporate policies.
MARKET TRENDS & DRIVERS
Exponential Growth of Battery Technology
Since 2000, batteries have undergone massive growth under technological innovations, resulting in lithium-ion battery development. Li-ion batteries are increasingly gaining prominence worldwide as rechargeable batteries. The expanding adoption of this battery is leading to the growth of its dominance year-over-year. Due to the rising demand for enduring battery life, several advances were made in EV batteries for extra backup capacity. This has considerably improved the performance and efficiency of electric vehicle Li-ion batteries. It has also improved energy density, charging rate, cyclability, safety, and stability. These batteries take less than an hour for a full charge and last longer. Hence, the demand for these electric vehicles (EV) batteries recycling market is growing significantly.
Rising Gasoline Prices
Gasoline prices are increasing continuously worldwide, resulting in a massive challenge for consumers and businesses. Most advanced countries have higher gasoline prices than developing economies as they major export gasoline vehicles and products. The price variation is due to diverse subsidies and taxes offered and charged by governments. Hence, the constant increase in gasoline prices in various countries drives consumers toward electric vehicles, thereby supporting electric vehicle battery recycling market growth. The U.S., Germany, the U.K., and several other European countries are among the key markets for electric vehicles. However, rising gasoline prices in these countries promote electric vehicle adoption in the industry.
Instabilities in Raw Material Pricing
Raw material costs account for approximately 50%–60% of the overall cost of production in the global electric vehicle battery recycling market. The prices of major raw materials for producing and manufacturing electric vehicle batteries and their accessories—steel, plastic, and rubber—have been volatile over the last few years. The instability of raw material prices poses a serious threat to vendor margins. Chinese manufacturers that offer cheap and high-quality EV batteries have added to the worries of prominent vendors to comply with the growing demand and changing industry standards cost-efficiently. These factors burden vendors that strive to manufacture efficient EV batteries at affordable prices to cope with the competition in the market. Therefore, these factors are anticipated to decrease demand for EV battery recycling.
INSIGHTS BY PROCESS TYPE
The hydrometallurgical process segment accounted for the largest electric vehicle battery recycling market share in 2022. The large share of this segment is mainly attributed to the growing need to remove organic materials from Li-ion batteries and extract metals from ores with low metal content, increasing demand for a less expensive, scalable, flexible, low-cost, and low-environment-impacting recycling process. The growing need to extract a wide range of materials, including copper, silver, nickel, lithium, and zinc, the increasing need for selective separation of materials through chemicals, rising demand for low energy consumption, less waste, and low impact on the atmosphere are responsible for the growing demand for hydrometallurgical process segment.
INSIGHTS BY CHEMISTRY TYPE
The global electric vehicle battery recycling market by chemistry type segments as lithium-ion batteries (Li-ion), lead-acid batteries, nickel, and other batteries. In 2022, the lithium-ion batteries segment is expected to account for the dominant segment in the global market. Lithium-ion batteries used in electric vehicles contain many valuable materials worth recovering, which are disassembled and shredded for recycling. Once shredded, the materials are sifted and categorized based on their nature and size. Factors such as the rising adoption of electric-powered vehicles, increasing demand to recover valuable materials from Li-ion batteries to reduce the essential for new mining and processing of raw materials, low self-discharge rate batteries, and growing need for high energy density for EVs are contributing to the large industry share of this segment.
INSIGHTS BY END USERS
The global electric vehicle battery recycling market by end-user segments into commercial vehicles and passenger cars. The commercial vehicles segment is anticipated to account for the largest global industry segment. Factors such as the rising government subsidies & tax rebates for using low-emission commuting vehicles, increasing government initiatives for the promotion of e-mobility, increasing investments to develop advanced commercial EVs, limited lifespan of batteries, and charging infrastructure are contributing to the large industry share of this segment.
North America dominated the global electric vehicle battery recycling market in 2022, valued at USD 1.65 billion in 2022. The region has many established players and a high technological advancement. With advances in Li-ion battery technology, the North American EV battery recycling industry is expected to witness high growth with a substantial surge in demand for accessories for battery-related tools. The industry is driven by consumer demand for innovative products and services, and there is a significant investment in research and development to support this demand.
Asia-Pacific is anticipated to register the highest CAGR during the forecast period in the global electric vehicle battery recycling market due to the initiatives to reduce the volume of EV battery waste, growing implementation of policies and toxic substances in the environment, rising concerns regarding the depletion of precious, and growing demand for lithium-ion batteries for EVs battery production. Moreover, the rising amount of battery waste, stringent government regulatory mandates for battery recycling, and high adoption of electric mobility in the region are also contributing to the growth of the electric vehicle battery recycling market in Asia-Pacific.
The global electric vehicle battery recycling market is characterized by low market concentration and high competition among players. The present scenario drives vendors to alter and refine their unique value propositions to achieve a strong industry presence. The global electric vehicle battery recycling market is fragmented and dominated by vendors such as ACCUREC-Recycling GmbH, American Manganese Inc., Battery Solutions, and G & P Batteries Limited. These major vendors have a global presence in three major regions, namely North America, APAC, and Europe.
The top electric vehicle (EV) battery recycling companies efficiently recycle these batteries and recover materials. This can be supported by the widespread adoption of electric vehicles across the globe due to government incentives, stricter emission regulations, and rising environmental consciousness. Therefore, the growing volume of spent electric vehicle batteries that will require recycling significantly supports the leading players. In addition, governments across various countries are recognizing the environmental impact of electric vehicle batteries and implementing regulations to encourage responsible recycling practices. Furthermore, continuous advancements in battery dismantling, separation, and chemical processes and the advent of advanced recycling technologies are creating a positive industry outlook.