2026 Market Summary: The global EV battery recycling market reached $12.99 billion in 2025 and is projected to hit $16.44 billion in 2026. Global capacity has expanded to 1.6 million tonnes/year, with leaders like Redwood Materials (100 GWh target), Li-Cycle ($375M DOE backing), and Umicore scaling rapidly. A 75 kWh NMC pack contains $2,000+ of recoverable metals. At Energy Solutions, we track 90+ commercial recycling plants worldwide.
Quick Answer: How Does EV Battery Recycling Work?
The Process: End-of-life EV batteries are collected → discharged safely → shredded to produce "black mass" → processed via pyrometallurgical (smelting) or hydrometallurgical (chemical) methods → refined into battery-grade nickel, cobalt, lithium, and copper. Recovery rates reach 95-99% for Ni/Co and 85-95% for lithium. The EU Battery Regulation mandates 65% recycling efficiency for Li-ion by 2025, rising to 70% by 2030.
What You'll Learn
Why EV Battery Recycling Matters in 2026
EV batteries are metal banks on wheels. A nickel-rich 75 kWh pack typically contains 30-40 kg of nickel, 6-10 kg of cobalt, 5-7 kg of lithium, and 35-45 kg of copper. Dumping those packs in landfills would be a strategic metals mistake and an ESG disaster.
Recycling serves three strategic goals:
- Reduce primary mining demand for constrained metals like cobalt and nickel.
- Cut lifecycle CO2e per kWh by reusing refined metals instead of starting from ore.
- Comply with regulation-the EU Battery Regulation and emerging US/Asian rules are making recycling mandatory, not optional.
Energy Solutions Intelligence
Our models show that by 2035, 25-35% of nickel and cobalt demand for EV batteries in mature markets could be covered by recycled material-if collection rates stay above 90% and hydrometallurgical recovery keeps improving. That fundamentally changes long-term metals price risk for OEMs and utilities.
🏭 Key Players: Top EV Battery Recycling Companies (2026)
| Company | HQ | Technology | Capacity (2025-26) | Key Developments |
|---|---|---|---|---|
| Redwood Materials | 🇺🇸 USA | Hydromet + Materials | 100 GWh target | Nevada + South Carolina; 60,000 MT minerals produced 2025; cathode production |
| Li-Cycle | 🇨🇦 Canada / 🇺🇸 USA | Spoke & Hub Hydromet | 50,000+ tonnes | $375M DOE loan; Rochester Hub; expanding North America |
| Umicore | 🇧🇪 Belgium | Pyro + Hydromet | 150,000 tonnes | Hoboken mega-plant; EU leader; cathode active materials |
| CATL Brunp | 🇨🇳 China | Integrated Hydromet | 500,000+ tonnes | World's largest; CATL subsidiary; closed-loop supply |
| GEM Co. | 🇨🇳 China | Hydromet | 300,000 tonnes | Shenzhen; cobalt/nickel focus; Africa sourcing partnerships |
| Northvolt Revolt | 🇸🇪 Sweden | Hydromet | 25,000 tonnes (2025) | Skellefteå plant; 50% recycled content target; EU-focused |
| Cirba Solutions | 🇺🇸 USA | Mixed technologies | 45,000 tonnes | Merger of Retriev + Heritage + Battery Solutions |
| SungEel HiTech | 🇰🇷 Korea | Hydromet | 42,000 tonnes | Korea #1; expanding to EU and US |
| Accurec | 🇩🇪 Germany | Vacuum thermal + Hydromet | 10,000 tonnes | EU specialist; high lithium recovery; expanding |
| Primobius (SMS/Neometals) | 🇩🇪 Germany | Hydromet modular | Scaling up | Mercedes partnership; modular design; EU deployment |
From Vehicle to Recycler: The End-of-Life Flow
Most packs do not go straight from vehicle to shredder. A simplified flow looks like this:
- In-vehicle monitoring: OEM battery management systems track State of Health.
- Decision point: When SoH drops to ~70-80%, the pack may be retired from traction use.
- Second life (optional): Packs above certain SoH thresholds are repurposed into stationary storage.
- Dismantling: Packs are removed, discharged, and separated into modules and cells.
- Recycling: Cells/modules go to shredding and refining, producing "black mass" and then refined salts.
Each hand-off (OEM ? dealer ? dismantler ? recycler) is an opportunity to lose traceability or value. Leading markets are moving toward producer-responsibility schemes where OEMs remain responsible for packs all the way to certified recyclers.
Recycling Process Technologies: Pyro, Hydro, and Direct
There is no single "battery recycling" process. Instead, plants combine mechanical, thermal, and chemical steps. Three high-level technology routes dominate commercial deployments:
Major Lithium-Ion Battery Recycling Routes and Material Recovery
| Route | Typical Steps | Metals Recovered | Indicative Recovery Rates (Ni/Co/Li) | Key Advantages / Drawbacks |
|---|---|---|---|---|
| Pyrometallurgical (Smelting) | Shredding ? smelting in furnace ? slag & metal alloy separation | Ni, Co, Cu (most), some Li in slag | Ni/Co: 90-98% | Li: < 60% | Robust and flexible, but energy-intensive and weaker on lithium/graphite recovery. |
| Hydrometallurgical | Shredding ? black mass ? leaching ? solvent extraction / precipitation | Ni, Co, Li, Mn, sometimes graphite | Ni/Co: 95-99% | Li: 85-95% | High recovery and product purity; requires careful waste and reagent management. |
| Direct / Cathode-to-Cathode | Mechanical separation ? relithiation / reconditioning of cathode material | Cathode powders (NMC, LFP, etc.) | Material yield > 90% where chemistry is well-sorted | Potentially lowest energy, but requires tight feedstock control and is earlier-stage. |
Simplified Mass Balance of a 75 kWh Nickel-Rich EV Pack
⚖️ Global Regulations: EU, US & China Comparison
Battery recycling regulations are tightening globally. Here's how the major markets compare:
| Requirement | 🇪🇺 EU Battery Regulation | 🇺🇸 US (IRA + State) | 🇨🇳 China |
|---|---|---|---|
| Recycling Efficiency (Li-ion) | 65% by 2025, 70% by 2030 | No federal mandate | Varies by province |
| Material Recovery - Cobalt | 90% by 2027, 95% by 2031 | IRA tax credits incentive | Encouraged, not mandated |
| Material Recovery - Lithium | 50% by 2027, 80% by 2031 | IRA tax credits incentive | Encouraged, not mandated |
| Recycled Content Mandate | Co: 16% (2031), Li: 6% (2031) | IRA 45X production credits | Under development |
| Extended Producer Responsibility | Required from Aug 2025 | State-level (CA, NJ, WA) | OEM take-back encouraged |
| Battery Passport / Digital ID | Mandatory 2027 | Not required | Pilot programs |
| Carbon Footprint Declaration | Required from Feb 2025 | Voluntary | Voluntary |
| Collection Rate Target | 73% by 2030 | No federal target | Varies by province |
Regulatory Bottom Line
The EU Battery Regulation is the most comprehensive framework globally. By 2027, any EV battery sold in the EU must have documented recycled content, a digital passport, and verified CO₂ footprint. Companies selling in Europe must prepare now or risk market access. The US relies more on incentives (IRA tax credits) than mandates, while China's provincial approach creates a patchwork of requirements.
Recovery Yields and Economics by Process Type
Recycling economics depend on gate fees (what recyclers charge or pay to accept packs), metal prices, technology, and scale. The table below uses indicative numbers for a 75 kWh nickel-rich pack in 2026.
Indicative Recycling Economics per 75 kWh Pack (2026, Mature Markets)
| Region / Scenario | Gate Fee or Net Processing Cost | Recovered Metal Value | Net Economics per Pack | Notes |
|---|---|---|---|---|
| EU, Hydro Focus | +$150 (OEM pays recycler) | - $2,100 | - +$1,950 before OPEX | High nickel and cobalt content; strong policy support and carbon costs. |
| US, Mixed Pyro + Hydro | +$50 to +$100 | - $1,800 | - +$1,700 before OPEX | Lower average cobalt, more LFP reducing blended value. |
| Asia, High LFP Share | $0 to +$80 | - $1,200 | - +$1,150 before OPEX | LFP packs have lower metal value; economics favour scale and automation. |
*Values exclude logistics and plant OPEX; real margins depend heavily on local labour, power, and permitting costs.
Global EV Battery Scrap vs Installed Recycling Capacity (2020-2035)
🌍 Regional Analysis: Recycling Capacity by Region
🇨🇳 China
- CATL Brunp: 500,000+ T
- GEM Co.: 300,000 T
- Huayou Cobalt: 100,000 T
- Government subsidies for domestic processing
🇪🇺 Europe
- Umicore (BE): 150,000 T
- Northvolt (SE): 25,000 T
- Accurec/Primobius (DE): Scaling
- EU Battery Regulation driving investment
🇺🇸 North America
- Redwood: 100 GWh target
- Li-Cycle: 50,000+ T
- Cirba: 45,000 T
- IRA driving $10B+ investments
🌏 Asia-Pacific (ex-China)
- SungEel (KR): 42,000 T
- JX Nippon (JP): 25,000 T
- OEM-tied closed loops
- Export restrictions on black mass
2026 Global Capacity Distribution
Total: ~1.6 million tonnes/year installed capacity (2026)
🏭 Real-World Case Studies: Verified Recycling Projects
The following are documented, operational or under-construction commercial battery recycling facilities. These represent the current state-of-the-art in EV battery recycling at scale.
Case Study 1: Redwood Materials Nevada — Largest Recycler Outside Asia
CURRENT RECYCLING CAPACITY
60,000+ tonnes/year (2024)
CAM PRODUCTION TARGET
100 GWh by 2026
LOCATION
Sparks (Tahoe Campus), Nevada
TECHNOLOGY
Hydrometallurgical + CAM Manufacturing
Founded by Tesla's former CTO JB Straubel, Redwood Materials operates the largest lithium-ion battery recycling facility outside of Asia. The Tahoe Campus in Sparks, Nevada receives over 20 GWh of batteries annually for recycling, including manufacturing scrap from Panasonic's nearby Gigafactory.
In April 2025, Redwood began commercial-scale production of Cathode Active Material (CAM) from recycled lithium-ion batteries—the first in North America. By 2026, the company targets 100 GWh of CAM production, enough to supply batteries for 1 million EVs annually.
Sources: Redwood Materials Press Releases, Electrive, Canary Media (2024-2025).
Case Study 2: Li-Cycle Rochester Hub — First DOE-Backed Hydromet Hub
DOE LOAN FACILITY
$475 Million (Nov 2024)
TOTAL PROJECT COST
~$960 Million
PLANNED OUTPUT
8,250 T Li₂CO₃ + 72,000 T MHP/year
LOCATION
Rochester, New York
Li-Cycle's Rochester Hub is designed to be North America's first commercial-scale hydrometallurgical facility for recycling critical battery materials. In November 2024, the company finalized an upsized $475 million DOE loan facility—the first DOE loan for a battery recycler—underscoring its strategic importance.
The Hub will process "black mass" from Li-Cycle's regional "Spoke" facilities across North America and Europe. Construction was paused in late 2023 due to cost escalations, but the DOE backing has de-risked the project. Full operations are expected once additional private financing closes (deadline: November 2025).
Sources: Li-Cycle SEC Filings, DOE LPO, Rochester Beacon, Fastmarkets (2024).
Black Mass Processing Costs: Regional Comparison (2026)
Black mass is the intermediate product from mechanical shredding of batteries. Processing it into battery-grade metals varies significantly by region.
| Region | Avg. Processing Cost ($/kg) | Primary Technology | Key Cost Drivers |
|---|---|---|---|
| 🇨🇳 China | $0.80 - $1.20 | Hydromet (integrated) | Scale, cheap labor, lower environmental compliance |
| 🇪🇺 Europe | $1.80 - $2.50 | Pyro + Hydromet | Energy costs, EU environmental compliance, labour |
| 🇺🇸 North America | $1.50 - $2.00 | Hydromet (newer plants) | Automation investments, IRA credits offset some costs |
| 🇰🇷 Korea | $1.20 - $1.60 | Hydromet | OEM partnerships, tech efficiency |
Metal Recovery Rates by Technology (2026 Commercial Plants)
| Metal | Pyrometallurgical | Hydrometallurgical | Direct Recycling (Emerging) | EU 2031 Target |
|---|---|---|---|---|
| Cobalt (Co) | 90-98% | 95-99% | ~95% | 95% |
| Nickel (Ni) | 90-98% | 95-99% | ~95% | 95% |
| Lithium (Li) | <60% (slag loss) | 85-95% | 90%+ | 80% |
| Copper (Cu) | 95%+ | 95%+ | 90%+ | 95% |
| Graphite | 0% (burned) | 0-30% (experimental) | 70%+ potential | Not specified |
Global Recycling Capacity vs Scrap Volumes
Recycling capacity is racing to catch up with the EV wave. In 2020, global installed capacity could handle an estimated 150,000 tonnes/year of battery scrap. By 2026, announced plants take that to over 1.6 million tonnes/year, but regional mismatches remain:
- Over-capacity emerging in parts of China for LFP and NMC black mass.
- Capacity gaps for Europe and North America unless announced projects reach FID.
- Logistics and safety regulations limiting cross-border shipments of end-of-life packs.
For OEMs and energy developers, the question is no longer "will recycling exist?" but "where will my scrap actually go, and at what price?". Long-term offtake contracts for black mass and recycled metals are becoming a competitive differentiator.
Devil's Advocate: When Recycling Struggles
Battery recycling is not automatically clean, profitable, or universally available. Several realities complicate the "closed loop" story.
- Collection gaps: Packs in secondary markets and informal workshops can leak out of official take-back systems, especially in emerging economies.
- Economics of low-value chemistries: LFP packs have far less recoverable metal value, making their recycling highly sensitive to gate fees and regulation.
- Environmental performance: Poorly designed smelters can shift pollution from mines to smokestacks if emissions controls are weak.
- Data and safety: Incomplete pack data, damaged modules, and mixed chemistries increase fire risk and lower process efficiency.
- Policy fragmentation: Differing rules across states and countries raise compliance costs and slow investment in new plants.
Serious circular-economy strategies assume less-than-perfect collection and push for better tracking (digital passports), stronger safety standards, and minimum recovery thresholds in regulation.
Outlook to 2030: Metals Supply from Recycling
By 2030, EV battery recycling will still be a minority share of global metals supply-but a strategically important one.
- Scrap volumes: Annual end-of-life and production scrap rising from ~1.4 Mt in 2026 to 5-7 Mt/year by 2030.
- Share of demand: Recycled metals covering 10-15% of global nickel and cobalt demand for batteries, and 5-10% of lithium.
- Regional hubs: China, EU, and North America each operating several plants above 100,000 tonnes/year capacity.
- Cost trends: Automation and scale reducing processing costs per tonne by 20-30% vs 2024 levels.
- Design for recycling: More packs using standardized formats, easier module access, and chemistries chosen with recyclability in mind.
Recycling alone will not remove the need for new mines in the 2020s, but by 2030 it will be a credible second supply pillar that cushions metals prices and strengthens OEM resilience against supply shocks.