As India’s EVs age, supply of recycled lithium rises

For recycling purposes, lithium can be found in end-of-life lithium-ion batteries used in EVs, telecom towers and electronics. So far, electronics was the largest generator of lithium recycling in India, but this is now changing.

Nitin Gupta, Co-founder and CEO for Attero, an electronic asset management company (AMC) shares Singh’s enthusiasm, but expects the EV share in total lithium recycling stock to touch 30 percent this year and 80 percent in the next five years.

Industry estimates expect the total size of the lithium recycling market to cross two lakh tonnes by the end of the current decade, dominated by both end-of-life EV batteries and manufacturing waste from the EV sector.

Gupta points out electronic waste currently brings 60 percent of the feedstock, but expects this to fall to a marginal 5 percent in the next five years. He expects majority of the remaining 95 percent to be sourced from lithium-ion batteries used to power vehicles, followed by those used to power telecom towers.

Not enough capacity

Somesh Kumar, Partner, Power & Utilities Leader, EY India, has a word of caution in this expected boom. “The global average of the recycling rate of lithium batteries is low, at 4-5 percent in some major geographies like Europe and US. Technology, logistics, regulatory and cost factors are primary challenges to this low rate,” he said.

Singh of BatX elaborated on the logistics challenge. “We are currently tracing these batteries from the open market, but a better sourcing value chain needs to be established with car dealers, EV OEMs and other points where these batteries could end up,” he said.

While organised data is difficult to come by, Rajat Verma, Founder at Lohum Cleantech, which operates in the lithium-ion battery recycling space, agrees. “In India itself, while we are looking at a current feedstock potential of 50,000 metric tonnes, there is an industry capacity only for recycling just 20,000 metric tonnes, which means the remaining batteries are already lost in the system,” he said. Verma pointed out the ministry’s mandate to ensure 20 percent of the cells in the lithium-ion batteries is through recycled material, which will further create a huge demand side pressure.

Exports, margins and expansion

Existing players in the lithium-ion recycling space sense the opportunity and plan to increase capacity manifold. According to data sourced from a joint report by Niti Aayog and the UK government, Attero, Exigo, and Ziptrax have 20,000 tonnes, 10,000 tonnes and 5,000 tonnes of capacity in the pipeline respectively. This would be a manifold increase considering none of these players currently operate more than 1,000 tonnes each.

Nearly all of the lithium derived in different forms through recycling in India is currently exported. Industry executives peg the margins for lithium recycling at as high as 40 percent. “This makes it a lucrative business, but technology-based entry barriers exist,” said Singh of BatX Energies.

Gupta of Attero said the industry has held discussions with the government to develop India as a recycling hub for these batteries. “With a net zero impact, this can be achieved without any harm to the environment,” he added, addressing any environment hazard concerns. Not much government action has happened on that front so far.