Battery recycling could be the next investor darling of the EV era
- ByStartupStory | July 12, 2022
To secure an EV supply chain & avoid raw material shortages, automakers and suppliers are looking to a hitherto overlooked domain: battery recycling. In the last 18 months, the industry has witnessed a surge of interest from EV manufacturers and venture capital companies, resulting in a flurry of alliances and investment transactions. According to Alex Smout, principal at InMotion Ventures, Jaguar and Land Rover’s venture capital arm, whose portfolio encompasses Ascend Elements, formerly known as Battery Resourcers, the momentum appears to be growing.
According to AquaMetals, around 15 million tonnes of lithium-ion batteries are estimated to be retired by 2030, the timeframe most manufacturers have set for the phase-out of gas-engine vehicles. The Nevada-based metals recycler anticipates that the battery recycling business would exceed $18.7 bn by the end of the decade. Posh, an EV battery recycling firm, acquired $3.8 million in a seed round sponsored by Y Combinator & Metaplanet last month. After seeing defective Chevrolet Bolt batteries stacking up in a warehouse, its founders decided to shift from manufacturing high-end robots to something like the restaurant industry. Instead, they sought to use that tools to automate the battery recycling process.
Many automakers are aiming to become more vertically integrated & bring as much of the battery lifecycle in-house to prevent the same supply chain difficulties seen during the COVID-19 epidemic. Because of this push toward vertical integration, automakers are investing in startups across the whole lifespan, from battery cell technology to recycling. VW has invested in QuantumScape, BMW had invested in Our Next Energy, and GM has invested in Soelect, a fast-charging battery startup, and also SolidEnergy Systems.
While much of the focus has been focused on battery tech start-ups, recycling firms are also gaining traction, which means collaborations and investment. Redwood Materials is likely the most recognizable and buzzed-about company in the industry. However, there are many more companies around the globe, ranging from publicly listed organizations such as American Battery Technology Company, AquaMetals, and Li-Cycle to startups such as Ascend Elements and established firms such as Accurec Recycling & Retriev Technologies. The majority of battery recycling transactions fall into the collaboration and investment category. However, at least one purchase has occurred inside the industry. Cox Automotive got Spiers, a firm that works with manufacturers to repair, replace, or recycle EV batteries, last year.
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