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The battery recycling industry is crucial for the transition towards electric mobility, ensuring the circularity of materials, reducing the need for virgin materials, and conserving resources. The sector has expanded alongside growing EV sales; however, the recycling industry is facing numerous challenges on the road to industrialisation.
Challenges Around Finance
Currently, end-of-life (EoL) EV batteries are limited and not available for widespread recycling. As a result, the main feedstock in the industry is production scrap from gigafactories, with EoL batteries not expected to become the dominant feedstock until beyond 2030. Consequently, while players build out facilities, they are heavily reliant on equity and debt financing. This reliance poses significant challenges.
For instance, Li-Cycle raised USD300 million in a SPAC listing on the NYSE in 2021. Since then, the company has held multiple funding rounds to expand its operations across North America and Europe. Despite this, since its peak in 2021, its share price has dropped over 95%, and the company has become increasingly strapped for cash. In March 2024, it announced it was delaying further expansions, putting on hold the construction and operation of multiple facilities due to financial struggles. Li-Cycle is not alone in this struggle; investor confidence in the recycling space has declined. Since January 2022 Rho Motion’s battery recycling share price index has dropped over 100 percentage points. With profitability a long way off, securing financing is crucial for many players.
Players Leaving the Market
Some companies have found the recycling landscape too challenging and have decided to…
Image credit: Adobe Stock
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