The EV revolution is not slowing down, but in 2025 the conversation is shifting. It is no longer just about range and charging speed. The new frontier is what happens when today’s batteries reach the end of their first life. Recycling has moved from the sidelines to the center, shaping how automakers secure materials, manage costs, and keep the future of driving electrified.
The Big Picture
The EV battery recycling market was valued at about $3.6 billion in 2024 and is projected to grow by nearly 24 percent each year. Asia still leads the industry, but North America and Europe are rapidly scaling up. Governments and automakers alike understand that relying solely on mined resources is not sustainable. Recycling is the pressure valve that keeps growth possible.
Most of the batteries being recycled today are not end-of-life packs from recent EVs. Instead, recyclers are working with production scrap, early warranty returns, accident write-offs, and older hybrids from the 2010s. This steady flow is already enough to test and prove large-scale facilities, but the big wave of retired EV packs is still a few years away. Companies are building capacity now to be ready when it comes.
The Technology That Makes It Happen
Modern recycling is far more advanced than just shredding and burning.
Hydrometallurgy uses chemical solutions to separate high-purity metals from shredded “black mass.” These materials can go directly into new battery production.
Pyrometallurgy relies on smelting to recover cobalt, nickel, and copper, though additional steps are needed to capture lithium.
Direct Upcycling takes things further by restoring cathode material without breaking it down to base metals, saving time, energy, and cost.
With automation and robotics being added to the process, dismantling and recycling are becoming faster, safer, and more efficient.
Key Players
Redwood Materials (USA)
Founded by Tesla cofounder JB Straubel, Redwood is leading the push for closed-loop recycling. Its South Carolina site is aiming for 100 GWh of cathode active material production with recovery rates above 95 percent. Partnerships with Toyota and Panasonic lock in demand.
Ascend Elements (USA)
This Kentucky company uses a “hydro-to-cathode” process that skips unnecessary steps and reduces carbon emissions by nearly 50 percent compared to traditional methods.
BASF (Germany)
BASF now runs a black-mass facility capable of processing 15,000 tonnes per year. Partnering with Stena, it is creating a steady supply of recycled material for Europe’s growing battery industry.
Mercedes-Benz + Primobius (Germany)
At Kuppenheim, Mercedes has launched an integrated plant with Primobius, achieving recovery rates above 96 percent. The project shows how automakers are taking direct control of their supply chains.
CATL + Brunp (China)
China’s recycling ecosystem remains unmatched in scale. CATL and Brunp run a fully vertical system where used cells are recycled directly into new precursor material.
Other important names include Umicore in Europe, Lithion in Canada, and Li-Cycle, now owned by Glencore.
The Art of Recycling
Redwood Materials provides one of the clearest examples of what large-scale EV battery recycling looks like today. Their process is designed not just to recover metals, but to deliver materials that go directly back into battery production.
Intake and Preparation
The journey begins with intake, where used EV packs and scrap from factories are logged, discharged, and staged for processing. Safety is critical here, as these packs still carry significant energy.
Dismantling the Packs
From there, dismantling begins. Automated systems and skilled technicians break down each pack into modules and components, stripping out wiring, cooling systems, and casings.
Shredding into Black Mass
Once the cells are isolated, they are shredded in controlled conditions. What comes out is black mass, a fine powder containing valuable elements such as lithium, nickel, cobalt, and graphite.
Hydrometallurgical Recovery
This black mass then moves into hydrometallurgical processing tanks. Through a sequence of chemical baths and separation stages, each material is extracted and purified. Redwood consistently achieves recovery rates above 95 percent.
Refining Into New Materials
The final step sets Redwood apart from many competitors. Instead of selling the recovered metals as raw commodities, they refine them further into copper foil for anodes and cathode active material that can go directly into new cells. In other words, Redwood is not only a recycler, but also a supplier feeding the battery industry with ready-to-use inputs.
Extending Battery Life
Beyond recycling, Redwood has found another way to squeeze more value out of used batteries: repurposing them before they are recycled. Through its new Redwood Energy division, the company is turning partially degraded packs into stationary energy storage.
When a shipment of old EV packs arrives, diagnostics determine whether they still have usable capacity, often 50 to 80 percent of their original energy. Packs that qualify are reconfigured into modular storage units, complete with proprietary control systems to manage performance and safety.
These second-life systems are already at work. One standout project is a 12 MW / 63 MWh solar-powered microgrid in Nevada that supports Crusoe’s AI data center. This installation is the largest second-life battery deployment in the world and North America’s largest off-grid data center. Instead of being shredded immediately, these batteries are storing solar energy and reducing reliance on fossil-fuel power plants.
Eventually, when these second-life packs can no longer serve as storage, they return to Redwood’s main recycling line. At that point, they go through the same intake, shredding, and refining process as any other pack. By giving batteries a second purpose before recycling, Redwood extends their useful life, reduces waste, and demonstrates how EV batteries can be part of both transportation and energy infrastructure.
Industry Partnerships
Redwood Materials and other leading recyclers are building partnerships across the automotive, energy, and mobility sectors. These collaborations highlight how recycling is becoming integrated with both vehicle manufacturing and broader energy infrastructure.
Automakers
- GM Ultium Cells: Redwood recycles production scrap from GM’s Ultium battery plants, feeding recovered materials back into new EV manufacturing.
- Ford Motor Company: Ford invested $50 million into Redwood in 2021 and partnered to build a closed-loop battery recycling supply chain that handles both production scrap and end-of-life packs.
- Volvo Cars: Partnered with Redwood in 2022 to collect and recycle end-of-life batteries through California dealers and dismantlers.
- Toyota: Since 2022, Redwood has worked with Toyota to recycle and remanufacture EV batteries, supplying recycled cathode and anode materials back into Toyota’s system.
- Volkswagen Group of America (VW and Audi): In 2022 Redwood partnered with VW and Audi to recycle all EV battery packs from their U.S. operations.
- Panasonic: Supplies Panasonic with high-nickel cathode material and copper foil for U.S. battery production.
- BMW: Redwood has been confirmed as a supplier of recycled cathode active materials for BMW’s future EVs.
- Honda: Ascend Elements has an ongoing partnership to recycle and supply recovered nickel, cobalt, and lithium for Honda EVs.
Mobility Companies
- Lyft: Redwood recycles batteries from Lyft’s shared e-bikes and scooters to recover valuable materials.
- Lime: Partnered with Redwood to recycle end-of-life batteries from Lime’s global fleet of scooters and e-bikes.
Recycling and Materials Alliances
- Call2Recycle: Ascend Elements works with Call2Recycle to manage EV battery logistics and collection, aiming to process hundreds of thousands of packs by 2030.
- Elemental Strategic Metals: Joint venture with Ascend Elements in Poland to recycle EV batteries and create engineered materials.
- EcoPro Group: Ascend Elements signed an MOU with EcoPro to supply recycled materials for cathode production.
Mining and Heavy Equipment
- Caterpillar: Redwood began recycling lithium-ion batteries from Caterpillar’s electric underground loaders, such as the R1700 XE with its 213 kWh battery pack. Caterpillar Venture Capital has also invested in Redwood’s Series D round, strengthening ties between the two companies. This partnership ensures that heavy equipment batteries get a second life when possible and are ultimately recycled back into raw materials.
Energy and Data Infrastructure
- Crusoe Energy: Redwood deployed a 12 MW / 63 MWh second-life battery microgrid in Nevada powering Crusoe’s AI data center.
These partnerships show how recycling is no longer a standalone activity but a central piece of the global EV and energy ecosystem.
Policy Pressure
Recycling is no longer optional. Around the world, regulations are tightening, forcing automakers and suppliers to build recycling into their plans.
Europe: The EU Battery Regulation is the strictest framework yet. By 2027 all large batteries must carry digital passports. By 2031 they must meet minimum recycled content requirements: cobalt 16 percent, nickel 6 percent, lithium 6 percent. Targets rise again in 2036.
United States: The Department of Energy is investing heavily in new facilities. The EPA has also clarified handling rules, making it easier to transport and process spent packs without endless paperwork.
Canada: The Electrified Vehicle Battery Recovery Program launched in 2025, coordinating OEMs and recyclers nationwide. This program ensures consistent standards across the country rather than a patchwork of regional approaches.
Market Trends Reshaping the Game
The industry is being reshaped by several key trends that will define the next decade.
The rise of LFP
Lithium-iron-phosphate batteries are gaining ground fast, especially in lower-cost EVs. Popular examples include Tesla’s standard-range Model 3 and Model Y, Ford’s Mustang Mach-E in certain trims, and many Chinese EVs such as those from BYD. These packs contain little cobalt or nickel, so recyclers are pivoting to focus on lithium and graphite recovery. The economics are shifting.
Spoke-and-hub systems
Instead of shipping whole packs across continents, companies are developing local facilities to dismantle and shred batteries before sending the concentrated black mass to larger refineries. This reduces risk, cost, and emissions.
Automation and AI
Battery packs are complex and dangerous to take apart manually. Robotics and AI are stepping in to speed up disassembly, reduce risks to workers, and maximize recovery rates.
Why It Matters
This is not just about hitting sustainability goals. Recycling is a strategy that keeps the supply chain stable and the EV industry moving forward. With lithium demand expected to triple this decade, automakers cannot rely on mining projects alone. Recycling ensures the pipeline of critical materials stays open.
For enthusiasts, this has a direct impact. Recycling helps guarantee that the next wave of performance EVs, from sports cars to muscle sedans to high-output crossovers, can actually be built at scale. Without it, bottlenecks in supply could slow down innovation and push costs higher.
What’s Next
The next two years will be decisive for the industry:
Europe steps up enforcement
The EU will begin enforcing recycled content rules. Automakers will have to prove compliance or risk penalties.
U.S. facilities go live
DOE-backed plants will transition from construction to production, bringing large-scale domestic recycling online for the first time.
Adapting to new chemistries
Recyclers are already experimenting with sodium-ion and other emerging chemistries. These will demand different recovery techniques and could reshape the value equation.
The Road Ahead
Battery recycling has gone from niche experiment to essential infrastructure. The companies that master this process are not only securing their own supply but also defining how affordable, how powerful, and how sustainable the EV industry will be in the years to come.
