Recyclers are rapidly prepping for auto battery bonanza

Tribune Content Agency

WIXOM, Michigan — The recycling of electric vehicle batteries might be a newer business, but preparations to reach its full potential are in full swing — including at a facility in Metro Detroit.

North Carolina-based Cirba Solutions, a company formed in 2022 after the merger of Heritage Battery Recycling, Retriev Technologies and Battery Solutions, is partnering with such major automakers as General Motors Co. The company announced in March it’s investing $300 million in a lithium-ion EV battery recycling flagship facility in South Carolina.

And Cirba, with an operation in Wixom where it breaks down batteries to send them off to a processing facility in Ohio, plans to keep building more plants because of the expected growth of the business. The company is investing more than $1 billion over the next decade to expand its infrastructure for the critical materials needed for EV batteries.

Another processing center to manufacture battery-grade salts from recycled batteries will be announced in the next 12-to-18 months, CEO David Klanecky said: “The South Carolina site is our seventh site.” Cirba expects to have four or more sites announced in the next five or six years “because we’re gonna have to really rapidly build out that capacity.”

After battling shortages of critical supplies, automakers have recognized the importance of establishing a circular supply chain to lower carbon footprints and reduce costs. That includes connecting with companies like Cirba and other recyclers to handle their battery scrap and end-of-life batteries.

“There’s a massive deficiency in the amount of supply,” Klanecky said. “You can’t start up enough new mines. You can’t find enough material locally. There’s obviously not a lot of nickel and lithium mines in North America nor cobalt mines in North America. So if you talk about regionalization and making sure that there’s an opportunity for countries to have some of that independence, then recycling is a natural choice.”

Why recycling matters

Recycling lithium-ion batteries used in EVs is a relatively new business, with most of the material today coming from scrap since most EV batteries haven’t aged enough to be recycled, according to a recent report by the McKinsey & Company consulting firm.

Production scrap globally is expected to remain the primary source of battery materials for recycling until 2030 and then volumes from end-of-life batteries are expected to surpass scrap, McKinsey predicts.

Michael Austin, senior research analyst of electric vehicles at Guidehouse Insights, predicts the growth of battery recycling will trail EV sales by a decade, if not more, especially since batteries are, in some cases, lasting longer than the estimated 10 years.

“Recycling growth will likely mirror EV sales, but on a 10-15 year delay,” Austin said in a statement. “That also means we probably won’t be getting to a circular battery mineral economy until 2040 or beyond.”

Still, automakers are prepping now, and even considering the materials used to package batteries.

“Sometimes what you add isn’t easy to separate at the end, and so we’re really looking at all of our design practices … how do we design with a circularity view in mind so that it is recyclable,” GM Chief Sustainability Officer Kristen Siemen said at the Morgan Stanley Annual Sustainability Conference last month.

That includes “everything from how much water something uses to how do we make sure that the sealant we’re using is easily removed to be able to separate the materials,” she added. Cirba is working with automakers on designing packs, so they’re easier to take apart and recycle the various parts.

“Right now, they’re just designing packs, putting them in cars and getting the cars on the road,” Klanecky said.

“Some of them are really easy to take apart, and some of them are really, really difficult to take apart. Because they’re not thinking about, ‘I gotta take this battery apart and recycle it,’ they’re just like, ‘I gotta get a battery in a car so I can be part of the EV race.”

At GM’s EV Live studio, an on-demand virtual educational platform the automaker provides for free, questions about battery recycling have started to emerge as one of the top concerns among consumers calling in, said Hoss Hassani, GM’s vice president of charging, at a recent event.

There are “a lot of misperceptions” about EV batteries going into landfills, he said, but they aren’t “because the battery in the vehicle over time will be worth more than that vehicle.”

Industries are considering how to lower emissions to appease consumers, investors and the government. Automakers have set targets for decarbonizing the supply chain that put recycling at the top of the list.

Recycled battery materials have a carbon-emissions footprint that’s more than 25% below new materials in batteries derived from a mine, according to the McKinsey report. There’s also the cost-benefit of recycling. Recycled material can provide a cheaper, easily accessed supply of battery components.

“Recycling would create a steady and local stream of raw materials that the OEMs can control,” McKinsey’s Andreas Breiter said.

And those localized supplies could be eligible for government incentives. For example, the Inflation Reduction Act allows for recycled battery materials like lithium, cobalt and nickel to qualify for tax credits even if they were not mined in the United States or in other countries that have U.S. trade pacts.

The Wall Street Journal highlighted last fall how the battery recycling race is heating up after the IRA passed last summer. With automakers pushing to reduce their reliance on China for battery supplies, they’re investing millions into recycling startups.

The Bipartisan Infrastructure Law passed in 2021 also provided funding to boost the domestic battery supply chain. Cirba was awarded $75 million in federal funds for expansion at its lithium-ion processing facility in Lancaster, Ohio. Employees at that facility extract metals out of the product and break them down into what’s called black mass, which contains valuable materials such as nickel, cobalt, lithium and graphite. That black mass is then processed to make battery-grade material for the battery’s cathode.

The government boosts here and abroad will help the nascent recycling industry improve revenue and profits. McKinsey predicts global battery recycling revenues will grow to more than $95 billion a year by 2040. The value generated per ton of battery material could reach about $600 as early as 2025.

Cirba’s growth

Cirba plans to be at the center of the EV battery recycling boom with plans to increase its lithium-ion battery processing capacity by about 600% in the next few years. The company predicts it will be able to recover more than 95% of the material in batteries.

At its Wixom facility, Cirba takes in everything from AA and AAA batteries to the packs inside old cellphones, computers and power tools.

“And we’ve got the capability to package it properly and transport it across anywhere in the United States,” Klanecky said.

In its 2022 annual sustainability report, GM highlights its “longstanding collaboration with Cirba Solutions, which handles dismantling and recycling components, as well as materials used in our EV batteries. Cirba also allows employees to drop off batteries at designated recycling points at certain GM facilities.”

In late 2022, GM and Cirba announced an extension of their collaboration for Cirba to recycle lithium-ion battery and cell scrap generated by manufacturing and research at some of GM’s properties through next year.

GM is also working with other recyclers. In 2022, GM Ventures, the automaker’s investment arm, said it made a strategic investment in Canada-based Lithion Recycling Inc.’s Series A financing round to support a new strategic partnership between the companies.

GM and battery cell manufacturing partner LG Energy Solution, through their joint venture Ultium Cells LLC, are partnering with Redwood Materials to recycle battery cell scrap at the Ultium battery production facility in northeast Ohio.

Today, about a third of Cirba’s business is centered around EVs and Klanecky expects it to grow to more than 80% by 2026-27: “We’re going to continue to collect things like consumer devices.”

“But at the same time, you’ve got a lot of electric vehicles that are on the road, a lot of battery plants in North America — over 900 gigawatt hours of capacity has been announced in North America, and that’s a lot,” he said. “Even if they run at like 10% scrap rate, that’s still 90 gigawatts of battery that has to be recycled … that’s like three gigafactories.”

He added: “There’s still a lot of work that has to be done to be able to produce these battery-grade metal salts. It’s just getting that experience of building out these further refined salt plants.”

Right now, the main challenge for Klanecky is “bending steel and putting it in the ground fast enough.”