EV Battery Recycling in the US
Now, all the electric vehicle batteries recycled around the US, albeit of their country of origin, will automatically qualify as ‘American-made’ for subsidies. This step is being touted as a landmark law to weaken China’s dominance over the EV battery manufacturing industry. The clause is a part of the USA’s Inflation Reduction Act (IRA) approved by the Biden government in late 2022.
According to IRA 2022, the US government has approved the combining of objectives of reducing domestic inflation brought on by the global energy crisis. Along with this, the country is also gearing up for its fight against climate change.
The legislation on automatic qualification of US-recycle EV batteries as ‘indigenous’ and their eligibility for subsidies has started a revolution in North America. Automakers are scrambling to set up recycling units to earn EV production incentives from the government.
Redwood Materials Plant
In February this year, the US-based Redwood Materials plant was awarded a loan of $2 billion to establish an EV battery recycling and remanufacturing unit in Nevada. According to JB Straubel, CEO of Redwood Materials, “the IRA treats recycled battery materials as locally “urban mined,” or materials recovered from scrap rather than obtained from mining.”
Li-Cycle’s New York plant Funded
The US has also funded a Canada-based recycling company Li-Cycle’s New York plant, slated to open later this year. The government has approved a loan worth $375 million to the business, which has earned the firm some ambitious investments, expediting the establishing process.
Li-Cycle’s Vice President Louie Diaz claims that lithium, cobalt, and nickel could face a shortage of supply in a few years with their increasing demand in EV production. However, they “can be recycled infinity times and not lose their power”, said Diaz.
Report by Stephen Gifford
A report published by Stephen Gifford, Chief Economist, Faraday Institution explained that lithium, cobalt, and nickel are all finite sources. These are often extolled as the ‘gold’ of the 21st Century. With most of the global economies planning complete electrification by 2030-2035, the demand for these raw materials is at an all-time high. Moreover, these minerals are found in very few places around the world, prompting governments to iron out bottlenecks in their supply chain.
EV Transition Around the World
China, Europe, and the US are witnessing a boom in the EV transition. IRA’s clause regarding subsidies on in-country EV battery recycling has sped up this transformation in the US. While the EU has mostly emphasized mandating the use of recycled battery materials, their Western counterpart has taken a more ‘self-reliant’ approach by controlling their own supply chain.
What is the “Closed-loop Supply Chains”
Christian Marston, Chief Technology Officer, Altilium Metals told Reuters that the race is on to build “closed-loop supply chains” where recycled minerals are put into locally produced new batteries. The UK-based Altilium Metals is currently setting up a recycling plant in Bulgaria and are planning to open another in the UK by 2026.
In a statement to Reuters, BMW Sustainability Chief, Thomas Baker has estimated the profitability of recycling EV batteries which have lithium, cobalt, and nickel. These, if recycled, can cut down the cost of cars by about an average of over $1000 to $2000 per vehicle.
Competing with the China EV Market
China dominates the global market in electric vehicle manufacturing and recycling of spare parts, presently. Its government had already tapped into this industry in 2014 when the Ministry of Industry and Information Technology issued policies to track and recycle EVs already in use. Today, 88 companies from China have official sanctions to recycle EV components, including batteries.
This business has steadfast growth potential with countries opting to turn toward electric vehicles to reach their go green goals. In fact, Expert Market Research, a global leader in market research, projects over 60 percent growth of up to $18 billion by 2028. With governments around the world hurrying to remedy the possible demand-supply issues that may arise in the future, IRA is a significant push in the right direction.
However, Chinese officials have condemned the legislation, calling it “anti-globalization” and accusing the US of “unilateral bullying”.
Read More:- Price War Begins in World’s Biggest EV Market