Fisking the Washington Post’s Report on the Economics of Battery Recycling

I stumbled across a report by the Washington Post, the new economics of battery recycling, and what was available to the public, the bulk of the report is behind a paywall, I could tell was mostly just AI. So I poked the Washington Post on X, but the fact that a media outlet of its caliber was pushing this kind of slop created an itch in the back of my mind, so I gave up and decided I would do another post and quote my original one.

Of course, since I am prone to rambling, my new post was too long for X, so I decided, something I should have done in the first place, is to rework it as an article for the Critical Materials Bulletin.

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So how do I know that the text in what I could see of the report was AI, it is pretty easy to spot near the start of the report before the paywall, there is two paragraphs which are versions of the same boilerplate wording I see in a lot of reports and articles about the economics of lithium-ion recycling.

First, they have this:

The industry’s biggest challenge is securing its feedstock, which is the supply of batteries that have reached the end of their service life. Most electric vehicle batteries are still in service, leaving recyclers dependent on manufacturing scrap until larger numbers of batteries reach the end of their lives in the mid-2030s. That timing mismatch has contributed to financial struggles for battery recyclers, even as substantial investment has poured into the sector.

That is absolutely correct, lithium-ion cells are lasting much longer than the 8 to 10 years many estimated just a few years ago, with it now looking like 12 to 15 years before traction batteries reach the 80% end-of-life capacity threshold. While some suggest that leasing and high demand for battery materials might eventually mean EVs will only see one owner before being recycled, that scenario remains a hypothetical for now.

Because of this unexpected longevity, the primary feedstock for lithium-ion recyclers currently comes from two sources: manufacturing production scrap and decommissioned ESS modules. The cells in these modules contain older ternary chemistries that have reached their end-of-life or are being actively replaced with LFP due to thermal and safety concerns.

And really that is all that is correct in that paragraph, but I will go into more of that later, but that segues us right into the next paragraph:

The shift to lithium iron phosphate (LFP) batteries is reshaping recycling economics. LFP batteries are attractive to automakers because they are less expensive, longer-lasting and avoid cobalt, but they contain fewer high-value materials, forcing recyclers to find new sources of revenue through graphite recovery, battery-grade chemicals, and other higher-value products.

LFP cells now make up 55% of the EV market in China and are the dominant chemistry for ESS, but the sector still has the same problem laid out above, except when it comes to the cells in a ESS it could be even longer with 15 to 20 years before they hit end-of-life and need to be recycled.

Also, on this wording “contain fewer high-value” that is AI hedging the text. Besides lithium, there are no other high-value materials in the cell. You do have copper from the anode, which one could argue is high-value, but the main thing with LFP and profitability is efficiency, but even with that, recyclers who have reached minimum scale for profitability because of efficiency will not touch LFP unless it is done through a fee model, it is that fee model that insulates them from the volatility of the battery metals market.

There is a possibility that a government agency could subsidize the recovery of phosphate, and the Department of Defense is all about that phosphate right now.

But it really does just come down to efficiency and the ability to use a fee model.

On this “other higher-value products” battery-grade is the higher-value product, and there really is just the graphite, the lithium, and the iron phosphate battery-grade versions. I guess a company could lump recovery and distilling of the electrolyte chemicals into that; There is a German company that offers a black mass production platform that does have some of that, but really it is just those three items.

But the real problem with the text is they are treating LFP like a separate challenge when it is really just another contributor to the first underlying problem. Lithium-ion cells are lasting longer than people expected, but “mid-2030s” is once again AI hedging the text, at least when it comes to ternary cells, LFP that sounds about right for when those cells will start to trickle in.

There was a report from 2022 by the Congressional Research Service - Critical Minerals in Electric Vehicle Batteries:

The growing number of EV batteries expected to reach their end of life (EOL) represents opportunities and challenges. Domestically, 200,000 metric tons of EV batteries are expected to reach EOL by 2027, or 800,000 metric tons globally that year, with accelerating growth as EV penetrate vehicle markets.

Because of many factors, that may not be a reality for domestic ternary cells till 2029 or so. But those cells will eventually like a rogue wave, show up, and unlike many suggest, they are not going to end up in a landfill, stranded perhaps at an auto wrecker, which by the way the new bill from Colorado does a horrible job trying to remedy even if everyone is praising it for doing that.

And that is the real problem, those cells will start to show up in semi-trailers at recycling facilities, and right now the United States lithium-ion recycling infrastructure is pathetically unprepared for it, with the latest IEA report placing 5% of global black mass production in the United States, alongside less than 1% of the global capacity to produce battery-grade material from that black mass. And currently I do not see that battery-grade capacity going up enough to be even a full percentage point in the next 2 years.

Heck, the only company in the United States that was able to produce battery-grade lithium carbonate at commercial scale from recycled material ended up going bankrupt due to gross negligence of its management.

And there is a question now about whether the new company that has taken over will be able to continue its operations or be shut down due to a law passed in 1976 that was intended to cover waste disposal, not reclamation. We will have to see what Georgia’s version of the EPA thinks of them storing material in semi-trailers in a leased parking lot.

The largest lithium-ion recycler in the country announced that they have found that using old cells in ESS is a much more economical route than recycling them. Consequently, those cells are basically being stockpiled instead of being processed into materials that could otherwise be injected into a supply chain still dependent on foreign imports for 99% of its lithium. Sure, it is a great way to monetize future feedstock until they are actually able to process them, but it really amounts to kicking the can down the road rather than helping to develop a domestic battery materials supply chain.

Then you have one company dealing with a state EPA entity that cannot answer a simple question on destination facilities, and for them the best route may be buying a half-completed facility where at one point the original owner had people wandering around for hours trying to find equipment that was listed as installed.

And this doesn’t even touch on how another company is looking to set up shop in California to produce black mass. What's the problem with that, you may ask? The company itself is just a shell that has really only one thing going for it a pre-established corporate infrastructure for exporting to Asia that they picked up by doing an acquisition of another company.

Sorry, I started to go off on a random diatribe on some of the real issues the lithium-ion recycling sector is facing today.

But by the time significant amounts of LFP hit end-of-life, the North American lithium-ion recycling sector will have years under its belt to prepare itself for that wave, with appropriately sized facilities that will have allowed recycling firms to reach the minimum scale needed for profitability no matter the chemistry.

And that is just some of the reasons I know that report is just AI nonsense.

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