Key Market Insights
The North American lithium-ion battery recycling market was valued at 66.34 million US dollars in 2020. It is projected to grow from 77.85 million US dollars in 2021 to 265.8 million US dollars by 2028, registering a compound annual growth rate (CAGR) of 19.1% during 2021-2028. The regional impact of COVID-19 has been unprecedented and drastic, exerting a negative influence on market demand in this region throughout the pandemic. According to our regional analysis, the regional market saw a sluggish growth of 11.8% in 2020 when compared with the average year-on-year growth recorded between 2017 and 2019. The rise in CAGR can be attributed to the rebounding demand and expansion of the market following the end of the pandemic.
Remarkable advancements in global battery recycling have driven the expansion of lithium-ion battery recycling infrastructure. Revolutions in consumer electronics and the automotive industry have triggered a massive shift toward battery-powered devices and vehicles, making lithium-ion batteries a core component of this major development. The rising adoption of lithium-ion batteries, coupled with a growing volume of batteries reaching their end-of-life stage, has boosted the demand for lithium-ion battery recycling services.
Blockades on supply chains and distribution channels hindered market growth during the COVID-19 pandemic.
The COVID-19 pandemic exerted adverse impacts on nearly all sectors. To curb the spread of the COVID-19 virus, nationwide lockdown measures were implemented, inflicting heavy losses on a wide range of industries. Accordingly, the lithium-ion battery recycling sector also suffered substantial setbacks. As the market is highly reliant on the automotive and consumer electronics industries, disruptions to these sectors dampened investment within the market.
Disruptions to supply chains and logistics routes impeded the transportation of spent lithium-ion batteries to recycling facilities in other regions. This directly cut off the supply of second-hand batteries delivered to enterprises for recycling and severely disrupted their daily operations.
Latest Trends
The determination to commercialize technologies for recycling processes represents a critical trend.
The industry has witnessed remarkable developmental approaches adopted by various industry players to scale up recycling capacity and drive market growth. The construction of new facilities is expected to significantly boost industrialization levels and may create strong demand for new technologies over the next several years.
For instance, Li-Cycle announced a new recycling plant in Rochester, New York in December 2020. The facility boasts an annual processing capacity of 10,000 metric tons. It adopts a horizontal aluminium recycling process and hydrometallurgical techniques to achieve a recycling rate of 95%. In April 2021, Li-Cycle Corporation unveiled plans to build another lithium-ion battery recycling plant in Gilbert, Arizona. This marks the company’s second plant in the United States and its third facility globally, with a maximum annual processing capacity of 10,000 metric tons of end-of-life batteries.
Stringent regulations prohibiting the dumping of untreated waste are fuelling market expansion
All electronic waste generates large volumes of toxic waste that ends up in landfills. Lithium-ion batteries are classified as hazardous electronic waste due to the risk of fires if disposed of improperly. Additionally, illegal dumping of electronic waste in vacant lots has become a pressing environmental concern. To address this issue, governments have introduced regulatory frameworks governing chemical and electronic waste management, which is projected to drive growth in the North American lithium-ion battery recycling market in the coming years.
As an example, under Ontario Regulation 30/20, every manufacturer subject to Section 12 is required to establish and operate a battery management system during the compliance period. Mandatory promotional and educational programmes will be rolled out to raise public awareness of producers’ initiatives for battery collection, reduction, reuse, recycling and material recovery, as well as encourage public participation in such initiatives.
Driving factors
Government regulations aim to boost the adoption of cleaner power sources and unlock new potential.
The growing shift toward leveraging clean energy to supply power for diverse applications is likely to accelerate market expansion. Regional trends point to a sharp surge in lithium-ion battery installations for large-scale energy storage and electric vehicles (EVs). The anticipated rising deployment of these batteries across multiple use cases will drive the replacement of underperforming older batteries, generating waste that creates opportunities for recycling.
According to an NREL report on grid-scale battery storage, lithium-ion chemistry dominated the U.S. grid-scale battery storage market in 2020. Driven by technological innovation and expanded manufacturing capacity, the cost of lithium-ion chemistries plummeted by 70% between 2010 and 2016, with further price reductions projected (Curry 2017).
Per the U.S. Energy Information Administration, utility-scale battery storage capacity installed in the United States in 2017 reached 240 MWh with a power output of 120 megawatts, and lithium-ion batteries accounted for over 90% of this power capacity. The rising uptake of lithium-ion batteries in grid-scale energy storage and the growing demand for such batteries have fueled the growth of the regional lithium-ion battery recycling market.
Growing acceptance of electric vehicles powered by lithium-ion batteries fuels market expansion
Nations worldwide have witnessed a shift toward electric vehicles to cut carbon emissions and drive robust progress across the industry. The adoption of diverse electric vehicle models has risen steadily over the years, leaving a massive number of batteries reaching their end-of-life (EOL). According to the Energy Information Administration, the U.S. automotive market shrank by 23% in 2020, yet electric vehicle registrations declined less sharply than the overall market.
A total of 295,000 new electric vehicles were registered in 2020, approximately 78% of which were battery electric vehicles (BEVs), with their sales edging up by 2%. Government incentives were scaled back in 2020 because Tesla and General Motors had exhausted their available tax credits. Canada’s new car market dipped by 21%, while new electric vehicle registrations remained nearly flat compared to the previous year’s figure of 51,000. Ranking as the world’s eighth-largest electric vehicle market, Canada recorded over 40,000 electric vehicle sales back in 2018. As electric vehicle uptake expands, a growing volume of lithium-ion batteries will reach the end of their service life and become eligible for recycling.
Rising environmental awareness among corporations and consumers, coupled with high electric vehicle adoption rates in the United States and Canada, serves as a major driving force for this market.
Limiting factors
High capital investment and the absence of stringent policies serve as major limiting factors.
The construction of new infrastructure demands high upfront costs as well as stable supply and recycling chains, which restricts the lithium-ion battery recycling market. Furthermore, the lack of appropriate regulatory frameworks in countries that recycle battery materials may hinder industrial expansion. E-waste recycling in the United States is regulated at the state level, with only half of its states having enacted e-waste recycling legislation. This fragmented set of regulations creates obstacles for enterprises aiming to design products for improved recyclability.
Via chemical analysis
The lithium cobalt oxide (LCO) segment can maintain the largest share due to the high returns from recycling.
Based on differences in battery chemistry, the North American market is segmented into lithium cobalt oxide, lithium iron phosphate, lithium cobalt oxide, lithium nickel cobalt aluminum oxide and lithium nickel manganese cobalt oxide.
The lithium cobalt oxide segment holds the largest market share owing to the extensive application of LCO lithium-ion batteries in electronic products. The consumption and rapid obsolescence of electronic devices generate massive volumes of e-waste.
As a primary power source, lithium-ion batteries are a major contributor to such e-waste. With a cobalt content of 17%, lithium cobalt oxide batteries also deliver the most lucrative profits from recycling. Lithium iron phosphate batteries adopt phosphate as the cathode material. Featuring low resistance, they boast excellent safety and thermal stability, and are applied in scenarios demanding a long service life and prominent safety performance such as electric motorcycles. Lithium manganese oxide batteries possess superior high-temperature stability and enhanced safety compared with other lithium-ion battery chemistries, hence they are deployed in medical instruments, power tools, electric bicycles and other equipment.
Lithium nickel cobalt aluminum oxide batteries are applied in powertrain assemblies and grid energy storage systems.
Thanks to their favorable energy density and cycle life, they show promising potential for use in the automotive industry. Lithium nickel manganese cobalt oxide batteries feature either high specific energy density or high specific power rather than both simultaneously, and are used in power tools and vehicle powertrains. Different types of chemical substances are yielded during the recycling process for all the aforementioned battery chemistries, which leads to variances in recycling costs and residual economic value.
Source Analysis
The adoption of electronics will drive the growth of this market segment.
By source, the market is segmented into electronics, power tools, electric vehicles and others.
The electronics segment accounts for the largest share of recycled lithium-ion batteries. Rising consumer uptake of portable battery-powered consumer electronics has led to a growing volume of second-hand batteries, which contributes to the dominant market share held by the electronics sector.
The power tools segment covers end-of-life lithium-ion batteries from power tools recycled through a variety of processes. LMO and NMC batteries are the primary battery types within this market segment. The electric vehicles segment refers to end-of-life lithium-ion batteries retrieved from electric vehicles via multiple recycling techniques. This segment is mainly composed of LFP, LMO, NMC and NCA batteries.
Electric vehicles represent one of the fastest-growing segments, fueled by surging demand for EVs and increased investments from manufacturers specializing in EV battery recycling. The other segments encompass end-of-life lithium-ion batteries from additional industries including industrial automation, UPS/data centers and telecommunications, which are recycled using diverse recycling methods.
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