EV and Storage Battery Recycling: Processes, Scale and Profitability
- Anonymous
- 9 hours ago
- 5 min read
Battery recycling is increasingly positioned as a critical enabler of energy transition, with implications for critical mineral supply and resource efficiency. As governments and companies pursue pathways toward net positive outcomes by 2050, scaling battery recycling will be essential to reducing reliance on primary extraction and improving the sustainability of battery supply chains. This blog examines battery recycling as an integrated system, covering the technical pathway, current market conditions, and firm-level behaviour, highlighting how capacity expansion, feedstock availability, and market incentives interact in practice.
Why This Matters?
Battery recycling is becoming a meaningful source of critical minerals and should be treated as an industrial market, rather than merely an environmental add-on.
As capacity builds faster than feedstock collection and downstream offtake, additional plants alone will not translate into higher recycling volumes.
Understanding recycling requires reading the full set of market signals together, namely feedstock availability, processing capacity, upstream supply, and downstream demand.
How Does Battery Recycling Work?
The core objective of battery recycling is to convert manufacturing scrap and end-of-life batteries into materials or metals that can be reused within industrial systems. In practice, this process typically follows a relatively standard pathway. Batteries first undergo pretreatment before entering the subsequent stage of material recovery.
During the pretreatment stage, feedstock originating from battery manufacturing processes or end-of-life batteries is collected and processed through a series of steps, including sieving, sifting, and flotation. Non-metal components such as casings and plastics are removed, resulting in an intermediate material known as black mass. This material represents a concentrated form of active components contained in batteries. The primary function of pretreatment is therefore to safely and efficiently concentrate metal-bearing materials, preparing them for downstream processing.
In the subsequent recovery stage, black mass is further processed using metallurgical techniques to separate and refine individual metals, such as lithium, nickel, and cobalt, into forms suitable for industrial use. Compared with pretreatment, this stage is typically more complex and capital-intensive, ultimately determining whether recycled outputs can re-enter battery manufacturing or related material supply chains. Through the sequential integration of pretreatment and material recovery, end-of-life batteries and scraps are transformed from waste into secondary resources.
At present, manufacturing scrap remains the primary source of feedstock for battery recycling, although this structure is shifting rapidly toward end-of-life electric vehicle (EV) batteries. By 2030, scrap generated during manufacturing is still expected to account for around two-thirds of available recyclable feedstock. From 2035 onwards, however, end-of-life EV and storage batteries are projected to become the dominant source, representing more than 90% of available feedstock by 2050.
While current industrial recycling largely relies on black mass and hydrometallurgical pathways, alternative approaches such as direct recycling are under active development in several markets. If these technologies can be industrialized at scale, they could broaden the range of viable recycling models and create additional competitive entry points for regions and firms beyond the current dominant players.
What Does the Battery Recycling Market Look Like Today?
Battery recycling capacity is expanding rapidly, with China playing a dominant role. In 2023, global capacity for battery processing and material recovery increased by 50% year on year, with China accounting for around 80% of this expansion. China is on track to retain approximately 75% of global pretreatment capacity and 70% of material recovery capacity by 2030.
The expansion of battery recycling capacity is currently outpacing the availability of recyclable feedstock. If all announced projects come online as scheduled, global recycling capacity in 2030 could be up to seven times the available feedstock. However, as electric vehicles increasingly reach the end of life, this imbalance is expected to reverse rapidly after 2030. By 2040, available feedstock is projected to amount to around 60% of announced recycling capacity, with regional differences being pronounced. China is likely to face excess recycling capacity relative to domestic feedstock for an extended period, while in Europe and the United States, excess capacity gradually dissipates after 2030. By 2040, announced recycling capacity in these regions would cover only around 30% of available feedstock.
By 2050, battery recycling has the potential to meet 15% to 40% of demand for lithium, nickel and cobalt, although this outlook is highly dependent on improvements in collection rates. At the same time, the reuse of end-of-life electric vehicle batteries in stationary storage applications could meet around 10% of global storage demand by 2050.
How Do Recyclers Operate Within This Market?
China is the global leader in battery recycling market, and within the Chinese market, Brunp Recycling stands out as a leading player. Brunp Recycling is a controlling subsidiary of Contemporary Amperex Technology Co., Limited (CATL). This blog uses Brunp as a case study to examine the market logic of the power battery recycling industry.
As Brunp Recycling is a non-listed entity, its standalone annual revenue and profit figures are not fully disclosed. Its core financial performance is therefore primarily reflected in CATL’s “Battery Materials and Recycling” business segment. According to CATL’s 2025 interim report, financial and operational data closely associated with Brunp indicate that its segment revenue reached RMB 7.9 billion in the first half of 2025, accounting for 4.4% of CATL’s total revenue, representing a year-on-year decline of 45.0%. However, the segment’s gross margin improved significantly, reaching 26.4% in the first half of 2025, an increase of 18.2% year on year.
Within the power battery recycling value chain, end-of-life batteries are typically first pre-treated into black mass, which is then further processed into recycled metals or battery materials. As a result, the revenue and profitability in battery recycling is often determined by the pricing and bargaining mechanisms of black mass and downstream recycled materials.
In China, the world’s most developed battery recycling market, black mass is typically priced using payables referenced to spot prices of virgin battery-grade minerals. Consequently, black mass prices are highly correlated with battery-grade metal prices. Payables are designed to cover recycling costs and margins and are generally set at a discount to virgin materials to reflect the higher impurity levels in black mass.
Since 2020, black mass price movements have closely tracked those of battery metals. This linkage helps explain the year-on-year revenue decline of Brunp amid a weak metal price. When raw material prices are at low levels, feedstock costs along the recycling pathway tend to decline in tandem, while processing costs remain relatively stable. This widens the cost advantage of recycling relative to primary production and enhances the profit resilience of recycling activities. This dynamic is consistent with the observed increase in Brunp’s gross margin.
Within this business model, the flexibility of payables cannot be ignored. For example, in recent developments in South Korea, recycling capacity utilization has increased rapidly, while black mass supply has not expanded at the same pace. During the commissioning phase of new facilities, recyclers have competed more aggressively for black mass feedstock to maintain high operating rates, pushing payables to exceptionally high levels.
At a macro level, battery recycling constitutes an integral component of a mineral supply. At the micro level, however, it continues to operate within the broader mineral price system.
Take Action
Policymakers: Provide long-term regulatory clarity on battery collection, transport and recycling obligations to ensure that feedstock availability can keep pace with expanding recycling capacity.
Industry players: Prioritize operational efficiency and integration across pretreatment and recovery stages to manage exposure to metal price volatility.
Investors: Look beyond headline revenue trends and focus on cost structures, feedstock access and utilization rates when assessing the resilience of battery recycling business models.
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