Battery recycling could be the next darling of investors in the EV era

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Automakers and suppliersIn an effort to strengthen the electric vehicle supply chain and avoid raw material shortages, they are turning to an area that was once overlooked: battery recycling.

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Suddenly, interest from electric vehicle manufacturers and venture capital firms has sparked a wave of partnerships and funding deals over the past 18 months.

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According to Alex Smout, director of InMotion Ventures, the venture capital arm of Jaguar and Land Rover, the momentum appears to be picking up as investor appetite for battery recycling picks up, a portfolio that includes Ascend Elements, formerly known as Battery Resourcers.

“The supply of recyclable batteries is growing fast, and no one expected it,” Smout told TechCrunch.. “So the ability of these companies to achieve scale sooner than previously thought is really showing.”


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About 15 million tons of lithium-ion batteries are expected to be decommissioned by 2030. AquaMetals. The Nevada-based metal recycling company expects the battery recycling market to top $18.7 billion by the end of the decade.

A clean slate means nimble startups and long-established players have the opportunity to set the direction for the industry.

Last month, Posh, a startup that automates electric vehicle battery recycling, raised $3.8 million in a seed round led by Y Combinator and Metaplanet. Earlier this year, its founders abandoned building high-end robots for the restaurant industry after seeing recalled Chevrolet Bolt batteries piling up in a warehouse. Instead, they tried to apply this technology to automate the battery recycling process.

“Currently, battery manufacturing is 100% automated, but battery recycling is 100% manual,” co-founder Wesley Zheng told TechCrunch.

Posh is working to change that equation by introducing its battery disassembly robotics to the assembly line.

“If you take into account the timeframe that automakers have set for the transition to all-electric batteries in 2030 or 2035, you can see that this will become a huge problem if we do not waste time on something that no one else is doing,” Zheng said. said.

Impending Demand

Even the founder and CEO of Redwood Materials, one of the leading players in the battery recycling industry, said he was concerned that the company was too late to meet demand.

J. B. Strobel, who is perhaps better known as Tesla’s co-founder and former CTO, has raised $775 million from Amazon, Panasonic, Ford, T. Rowe Price and others to become one of the world’s largest battery recyclers. In June, Redwood announced partnership with Toyota collect, remanufacture and recycle batteries and battery materials to ship to a battery manufacturing facility under construction in North Carolina. The company also has partnerships with Ford and Volvo.

“If you look at the volumes of electric vehicles we need on the roads in five or 10 years, I feel like we are starting to build infrastructure at scale too late to do that,” Strobel told the Financial Times. Conference “The Future of the Car” in May.

Many automakers, hoping to avoid the same supply chain headaches that arose during the COVID-19 pandemic, are looking to become more vertically integrated and ensure as much of the battery lifecycle as possible in-house.

For example, the Volkswagen Group has created a new company, PowerCo, to manage its global battery business, from raw materials to recycling. automaker started work on Thursday in the first of six battery plants it plans to build in Europe.

This desire for vertical integration is driving automakers to invest in start-ups across the entire life cycle, from battery cell technology to recycling. In the past five years alone, $42 billion in venture capital and growth stocks have been invested in this sector. according to TechCrunch and PitchBook analysis. VW backed solid-state battery company QuantumScape, BMW invested in Our Next Energy, and GM invested in Soelect fast battery charging start as well as Solid Energy Systems.

Growing Pool

While most of the attention (and investment) has gone to battery tech start-ups, recycling companies are also starting to take off, which means partnerships and investments. Redwood Materials is perhaps the most famous and noisy company in the sector. However, there are many more companies around the world, from publicly traded ventures like American Battery Technology Company, AquaMetals and Li-Cycle, to start-ups like Ascend Elements and established companies like Accurec Recycling and Retriev Technologies.

Most deals related to battery recycling fall into the category of partnerships and investments. However, the industry has seen at least one acquisition. Last year, Cox Automotive acquired Spiers, a company that works with automakers to repair, replace or recycle electric vehicle batteries.

States, too, are vying for a stake in a growing industry. Georgia has been particularly aggressive, pursuing blockbuster hiring deals and tax breaks to hire businesses needed to develop a closed ecosystem of batteries and electricity.

State awarded Rivian largest $1.5 billion bounty package in history build an electric vehicle factory near Atlanta.

Meanwhile, Hyundai is planning $6.5 billion electric vehicle plant outside of Savannah represents the largest economic development deal made by the Peach State. It will be located next to the $2.6 billion electric vehicle battery complex, which the South Korean manufacturer of lithium-ion batteries for electric vehicles SC incl. plans to open soon.

Georgia’s efforts seem to be working. Ascend Elements plans to open a $43 million battery recycling plant near SK On in August to process lithium, cobalt and nickel.

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