Electric vehicles (EVs) are gaining popularity as an eco-friendly transportation solution to reduce air pollution and greenhouse gas emissions. However, with the rapid increase in sales of EVs, spent lithium-ion batteries from these vehicles also pose a major disposal and recycling challenge. Electric vehicle battery recycling involves retrieving valuable and scarce materials like lithium, cobalt, nickel, and manganese from spent lithium-ion batteries of EVs to manufacture new batteries. This reduces mining of new materials and dependence on other countries for scarce raw materials.

The global electric vehicle battery recycling market is estimated to be valued at US$ 2.77 Mn in 2024 and is expected to exhibit a CAGR of 6.3% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.

Market Opportunity

The growing adoption of EVs worldwide has led to rising volumes of spent lithium-ion batteries that require safe and environmentally-friendly recycling. As per industry estimates, spent EV batteries could make up over 50% of the global lithium-ion battery waste in the coming years if left unaddressed. Developing viable and large-scale Global Electric Vehicle Battery Recycling Market Size infrastructure and processes can help address this looming e-waste issue while also securing a secondary supply of critical raw materials for new batteries. Establishing global collection and recycling networks especially in regions witnessing high EV sales can unlock opportunities to recover billions of dollars worth of materials annually from spent batteries. This will help boost the electric vehicle battery recycling market while reducing reliance on mining imports.

Porter’s Analysis

Threat of new entrants: The threat of new entrants is moderate due to the high capital requirements to build recycling facilities and match the economies of scale of existing players. However, with growing regulations pushing for recycling, this threat could increase over time.
Bargaining power of buyers: The bargaining power of buyers is moderate as buyers have a few alternatives for battery recycling services. However, as regulations increasingly mandate recycling, their power could increase.
Bargaining power of suppliers: The bargaining power of suppliers is low since battery suppliers for recycling are mostly the automakers themselves. Their dependence on recyclers to meet regulations is likely to keep their influence in balance.
Threat of new substitutes: The threat of new substitutes is low as battery recycling is indispensable for the sustainable growth of the Electric Vehicle industry to meet environmental norms. No close substitutes exist to this process.
Competitive rivalry: The competitive rivalry is high owing to the presence of a fair number of recycling service providers competing for business from OEMs. Moreover, with growing environmental awareness, more players are likely to enter this space.

SWOT Analysis

Strengths: Technologies like hydrometallurgical and pyrometallurgical processes enable the effective and large-scale recycling of EV batteries. Cost reductions due to economies of scale as the market matures.
Weaknesses: High costs involved in building recycling infrastructure and low margins exert pressure. Collection logistics challenges due to the dispersed nature of end-of-life batteries.
Opportunities: Tightening norms on e-waste recycling present a conducive regulatory environment for growth. Demand from automakers looking to strengthen sustainability chains.
Threats: Volatility in metal prices can impact profitability. Collection targets difficult to achieve without a well-established take-back system.

Key Takeaways

The global electric vehicle battery recycling market is expected to witness high growth over the forecast period of 2024 to 2031 on account of tightening emissions regulations mandating recycling targets. The global electric vehicle battery recycling market is estimated to be valued at US$ 2.77 Mn in 2024 and is expected to exhibit a CAGR of 6.3% over the forecast period 2024 to 2031.

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