European battery recycling market analysis
A profitable and sustainable business before 2035
Dr. Jörn Neuhausen and Dr. Philipp Rose
Key findings
- Battery market: High electrification rates and the ramp-up of EU cell production to ~900 GWh in 2030 will drive the EU recycling market up to ~6000 kt end-of-life batteries in 2040
- Regulatory drivers: Following Asian regulation, the EU revised its regulatory environment in 2023 – among other things, requiring a recycling efficiency of 70% from 2031 onwards
- Recycling technology: With a clear technological pathway and established supply chains, costs are expected to scale down by up to 50% for hubs operating at 40 kt and spokes at 10 kt
- 2030 EU recycling market outlook: By 2030, we expect more than €2 bn in investments into the EU recycling market. Handling further market growth through to 2035 requires additional investments of €7 bn
- Implications: Recycling will become a viable and sustainable business beyond regulatory pressure with projected ~€8 bn in revenue and potential reduction in battery cost
By 2030, ~40% of all light vehicles will be based on a BEV platform with over 3.4 TWh of battery demand
By 2040, battery recycling in Europe is up 10-fold vs. 2030 – driven by gigafactory scrap initially
Between 2030 and 2040, we expect a 10-fold increase in share of recyclable material. A fast ramp-up from 2030 onwards will happen because the first wave of electrification will reach its end-of-life.
Between 2023 and 2030, the gigafactory scrap will drive the market. With scrap rates reducing significantly, it will comprise ~10% of the market in 2040. ~5,950 kt of end-of-life batteries in 2040 will drive the market.
Implications
- Recycled material contribute significantly
In 2035, recycled material may account for up to 30% of Li, Ni, and Co demand for battery cell production. The EU recycling targets are expected to be met, with only minor deviations.
- Economic motivation drives ramp-up
With ramped-up operations and increasing battery disposal, the recycling business is capable of building viable and sustainable profits for all value chain stakeholders. - Recycling potentially reduces CAM price
With more recyclate available at competitive cost, a positive impact on battery prices can be expected through reducing CAM price by up to 20%, further spurring electrification and recycling market uptake.
Jan-Hendrik Bomke, and Felix Ferk also contributed to this report.
European battery recycling market analysis
This analysis was jointly developed with the "Production Engineering of E-Mobility Components" (PEM) chair at RWTH Aachen University. The authors would like to thank Prof. Dr.-Ing. Achim Kampker, Dr.-Ing. Christian Offermanns, Merlin Frank and Timon Elliger for the successful collaboration.
