On Recycling vs second life

“Should a used battery go to second life or recycling?” is a common question we hear. There is nothing wrong with asking it, but it is not very productive. As are the claims that “all batteries must go to second life” or “all batteries must go to recycling”.

A more productive approach would be to ask, “which parameters determine whether a certain used battery should go to second life or to recycling?”. This question sparks the conversation that enables the industry to move further towards figuring out how to buy recycled EV batteries. A conversation we would like to introduce.

First, let’s back up a bit. One thing is self-evidently true. We face exponential growth in use of critical raw materials from weak and unsustainable supply chains if the EV revolution continues its current trajectory.

  • Established and new battery producers have announced plans to build global production capacity of up to 2,256 GWh by 2025, up from 631 GWh in 2020 – a 250% growth in 5 years.
  • Lithium carbonate prices in China reached 410,000 yuan/tonne in February 2022, up from 100,000 in July 2021 – a 300% growth in 7 months.
  • BNEF found that investment in 2021 in the low-carbon energy transition totalled $755 billion, with electrified transport at $273 billion – an increase of 77% YoY.
  • The new battery regulation is yet to be put in place in Europe and yet the likes of GEM of China are adopting it anyway on top of the Chinese regulations from 2018 – a demonstration of how far compliance affects this sector, and how rapidly the status quo changes.

Back on topic. Today, the battery supply chains carry massive negative ecological and societal footprints. As batteries are predicted to outlive their respective EVs, the batteries are expected to end up in the fragmented ecosystem of local car dismantlers and repair workshops. As 39% of all end-of-life-vehicles (ELVs) in Europe were recognised as having “unknown whereabouts” in 2017 allegedly due to illegal export and dismantling. In 2020, one estimate was that circa 35% of vehicles in Europe are ultimately lost. This limited traceability and lack of accountability stifles the recycling industry that currently attracts billions in private and public investments. The rumoured advent of million-mile batteries, increasing the potential number of owners per vehicle, makes it even harder to make the right call. Delayed regulations on responsibilities, liabilities and transparency of batteries that lack any updates since the pre EV era, is not helping.

Adding to the complexity for circularity, battery degradation is commercially very much a black box. To address the non-linear nature of battery degradation and to keep up with high expectations on performance (in e.g. a vehicle), batteries are often removed with remaining storage capacity. There is consequently a large push towards repurposing used EV batteries to stationary storage, which has different performance requirements, to capture this value.

There is a window of opportunity to act and develop the necessary robust systems before millions of tonnes of batteries reach end of life, and people the world over will wonder how to sell, and how to buy used EV batteries. Inspired by this challenge, Cling develops the intelligent collection system able to be used both for recycling and second life electric vehicle batteries. The thesis is that each battery must go to where most commercial value is captured – only the right incentives will enable circularity.

Our platform virtually aggregates batteries at scale. As we engage with organisations across the industry, collaborate with partners and gain users, Cling amasses batteries and data. Batteries and data, two out of three factor that enables battery circularity. The third one being a functioning market to establish accurate pricing that reflects the true value of the batteries.

So, which parameters determine whether a certain used battery should go to second life or recycling?

Wait for it – that depends. We engage with multiple buyers and sellers daily, all of which have different risk appetites, ambitions, capabilities, and financial backing. None of these players know exactly what parameters to prioritise, but here’s a rule of thumb: price, location, volume, timing, and battery specifications.

Once these foundations are established, Cling works to match supply and demand and eliminate friction in the trade, before moving on to transport and logistics – a complex process that our customers don’t need to burden themselves with.

Next steps

To round things off, the perceptions of what waste is will change. Waste will ultimately be the ore in the circular economy. Recycling will compete with mining of raw materials. And Cling – well, Cling is taking on the mines.

In our seed announcement we said Cling’s marketplace is aimed at Nordic car dismantlers and repurposers across Europe. Interest has since come our way from a whole range of people and companies from outside Europe as well. If you are curious about what we do, or you are a recycler looking to source, or a seller wanting to shift your batteries – you can:

 

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