Reuse and Recycling EV Batteries - Why do we need both?

What happens to EV batteries at the end of their useful life in a vehicle? The three options that come to mind are recycling, reuse, and repurposing. This article will provide a deep dive into what happens to the used EV battery, technology progress, and second-life applications. We will also compare two options—recycling and reuse—and find out: should we prioritize reusing EV batteries or recycling them?

Recycling EV Batteries

Recycling EV batteries is one of the two discussed strategies for dealing with used batteries. The core idea is that critical materials contained in the EV battery—including lithium, nickel, manganese, and cobalt—can be used again. At the moment, several recycling techniques exist, including some advanced ones such as hydrometallurgy (which uses solvents to extract metals), pyrometallurgy (a high-heat smelting process), and direct recycling (which preserves and reuses cathode materials).

Today, with the usage of such techniques, it’s possible to extract 80–95% of valuable metals (nickel, manganese, cobalt, lithium) from Nickel Manganese Cobalt (NMC) batteries (1). Besides, despite many calling recycling an energy-intensive process, according to some studies, recycling has the potential to decrease CO2 emissions by 75–80% compared with virgin material (11). A recent Stanford report further highlighted that recycling lithium-ion batteries emits 58–81% fewer greenhouse gases, uses 72–88% less water, and consumes 77–89% less energy than mining new metals.

Despite the growing number of startups developing recycling technologies, recycling remains a complex field as a business. Some methods still require significant energy inputs, which impacts both sustainability and profitability. Besides that, the market is highly affected by the prices of critical minerals. Even though the recent Trump’s tariffs haven’t targeted those minerals, experts predict very high price volatility (18), which makes doing business in recycling even riskier than before. There’s a high probability that recycled material may not be economically viable.

Government Support and Investment

Recycling may be a risky sector to enter, but it’s also a critical component of the energy transition—one that has attracted strong government backing. For instance, the EU Battery Regulation sets mandatory minimum thresholds for recycled content in batteries by January 1, 2030: 12% cobalt, 85% lead, 4% lithium, and 4% nickel (3). These regulations aim to stimulate recycling infrastructure development and position it as a key priority within the EU’s circular economy agenda.

Global Momentum Toward Circular Battery Strategies

While the EU leads in regulatory and financial support for battery circularity, global momentum is growing. For example, the U.S. Department of Energy’s Vehicle Technologies Office has committed over $200 million toward battery recycling and reuse technologies. Beyond that, China mandates data reporting and certified recycling facilities for EV batteries to ensure traceability and circularity. (Source: U.S. DOE Battery Recycling Prize, 2024; China MIIT, 2023)

Financing Programs Supporting Battery Recycling

IPCEI (Important Projects of Common European Interest):
A €3.2 billion grant program aimed at building a sustainable and competitive European battery value chain, including dedicated support for recycling initiatives (4).

Horizon Europe Programme:
With a total budget of €95.5 billion, Horizon Europe supports the development of a robust European battery ecosystem by 2030. Within this framework, €115 million is specifically allocated to innovative recycling and circularity projects.

According to PwC, the EU battery recycling market is expected to attract over €2 billion in investment by 2030, with an estimated €7 billion more required to further scale and develop the sector.

EU-Funded Projects Focused on Recycling

BeyondBattRec:
Funded with €7.45 million, this project aims to recover up to 95% of critical metals such as cobalt, nickel, and copper, and 70% of lithium from lithium-ion batteries (5).
RESTORE:
This project is developing a scalable recycling process for end-of-life EV and domestic lithium-ion batteries. It focuses on automated sorting, safe pre-processing, smart dismantling, and the high-purity recovery of materials like electrolyte salts, graphite, and cathodes (6).
ReUse:
Targets recycling and circularity solutions for low-value lithium iron phosphate (LFP) battery waste streams (7).
REINFORCE:
Aims to develop a standardized, automated, safe, and cost-effective system for recycling and repurposing spent EV and stationary storage batteries (8).
REsolutION and BATRAW:
These initiatives, backed by over €19 million in EU funding, focus on advanced hydrometallurgical processes to recover lithium, cobalt, nickel, and manganese from EV batteries.

Recycling Initiatives Led by Industry

Cylib:
This German startup, backed by Porsche, is building what is expected to become Europe’s largest lithium-ion battery recycling plant. The €200 million facility secured €55 million in Series A funding in 2024 (9).
Altilium:
Altilium has made significant strides in battery recycling by recovering graphite—traditionally lost in high-emission pyrometallurgy—using a more sustainable, water-based hydrometallurgical process. The graphite, extracted from black mass using sulphuric acid, can be reprocessed and sold back to battery manufacturers (10).
BMW Group & SK tes:
Together, they’ve launched a pan-European EV battery recycling program aimed at recovering cobalt, nickel, and lithium from used batteries and reintegrating them into the manufacturing supply chain to create a closed-loop system (14).
Mercedes-Benz:
The company has opened Europe’s first in-house battery recycling facility in Kuppenheim, Germany. Using an integrated mechanical–hydrometallurgical process, the plant achieves a recovery rate of over 96%, with the reclaimed materials suitable for use in new EV batteries (15).

Reuse and Repurposing of EV Batteries

Reusing and repurposing EV batteries presents a practical and increasingly attractive alternative to recycling at the end of a battery’s first life. When removed from vehicles, EV batteries typically retain 70–80% of their original capacity, making them well-suited for less demanding, second-life applications—particularly in stationary energy storage. These second-life batteries can be 30–70% more cost-effective than new ones, offering significant savings for grid and backup storage systems (13). In fact, McKinsey projects that second-life battery storage could create a $30 billion market by 2030, driven by demand in residential, commercial, and industrial energy storage applications.

Moreover, compared to recycling, reuse generally requires far less energy and processing, resulting in a lower carbon footprint. This makes it not only a cost-effective solution but also a more environmentally sustainable one—especially relevant as the energy transition drives growing demand for efficient storage technologies. A 2024 study by DNV found that battery reuse can lower lifecycle CO₂ emissions by up to 50% compared to direct recycling (20).

Recent advances in EV battery technology—most notably increased range and durability—have also enhanced the viability of refurbishment and second-life deployment. For example, newer lithium-ion chemistries can support over 2,000 charging cycles, making them viable for up to a decade in second-life applications (21).

Challenges of EV Battery Reuse

Before batteries can be repurposed, they must be thoroughly tested, diagnosed, and reassembled. Understanding the condition of each battery is essential to ensure safety and performance in its new application. However, the wide variety of battery types, chemistries, and formats adds a layer of complexity.

Technical challenges related to degradation, diagnostics, and repurposing also come with significant costs. Safety is another key concern—batteries can pose fire and exposure risks if not handled properly. Issues during collection, storage, or transport can increase the likelihood of hazardous incidents. The European Commission estimates that improper handling of lithium-ion batteries causes over 1,200 fires in waste streams annually across Europe (19).

Government Support and Investment

While the Horizon Europe Programme includes initiatives to develop efficient technologies and business models for battery reuse, this strategy has received comparatively less attention than recycling in both media coverage and academic research.

However, one of such projects under the Horizon Europe Programme is Recirculate – we are developing innovative ways to solve challenges in batteries’ second life.

Industry-Led Battery Reuse Initiatives

Circu Li-ion:
Operating in Luxembourg and Germany, Circu Li-ion has created automated systems for safely upcycling lithium-ion cells. Their process includes safe discharging, dismantling, and diagnostic testing to determine whether individual cells are suitable for reuse or should be recycled. The company aims to upcycle three billion batteries by 2035, potentially reducing CO₂ emissions by up to 48% compared to traditional recycling methods (16).

The Future of EV Battery Reuse, Repurposing, and Recycling

As the EV market grows, reuse, repurposing, and recycling must be viewed as complementary strategies essential to circular economy and battery lifecycle management. Each approach faces certain challenges—from complex battery chemistries to safety concerns and economic feasibility—but together, they present great opportunities.

Rapid advances in dismantling technologies, state-of-health (SoX) diagnostics, and safe battery transport are helping to overcome challenges, unlocking new possibilities across the entire value chain. The potential impact is substantial: for example, according to a 2024 IEA report, increased recycling of critical minerals could reduce the need for new mining by up to 40% by mid-century (10, 12). Reuse strategies have the same great potential – we never know where the next big breakthrough could happen.

A pragmatic and smart approach today is a “reuse-first, recycle-later” model. Reuse extends the lifespan of EV batteries, allowing them to serve less demanding applications such as stationary energy storage before entering the recycling loop. This approach defers the environmental and financial costs of recycling, cuts demand for raw materials, and makes better use of the batteries’ remaining capacity—even after retirement from automotive use.

In short, a layered approach—prioritizing reuse when possible and leveraging recycling where necessary—offers the most sustainable, scalable path forward. It reduces waste, preserves valuable resources, and accelerates the transition to a circular battery economy.

Sources

Giving EV Batteries a Second Life: The Future of Reuse and Recycling