The market for recycling electric vehicle (EV) batteries is expected to be worth more than $2 billion globally by 2022.
More than half a million end-of-life EV battery packs will become available through the waste stream by that point.
Battery recycling is seen as a vital element in reducing the overall cost of EVs.
Analysis from Frost & Sullivan finds that recycling will become a significant part of the value chain from 2016 when significant quantities will become available for reuse of their lithium-ion.
Frost & Sullivan industry analyst Aswin Kumar said there are challenges to this. Price incentives may be helpful.
For second life, Li-ion batteries will have to compete with dedicated batteries used for current second-life applications such as stationary grid storage.
They will have to compete in terms of cost, power and energy storage, as most of the characteristics of Li-ion batteries with regard to their degradation at reuse are still uncertain.
"The cost of batteries, which is the main hindrance for EV adoption, can be lowered through reuse or second life applications,” remarks Kumar.
“Furthermore, with the rapid increase in the adoption of portable consumer electronic goods and their associated rechargeable lithium-ion batteries, battery recycling can reduce reliance on import or production of lithium.”
Though lithium is 100% recyclable, the battery-grade lithium from the recycling process is costlier than lithium from direct sources.
Lack of price incentives and legislation restricts lithium recycling.
Furthermore, there are only limited incentives for utilities using energy storage, thus hindering reuse activities.