Economics of recycling lithium-ion batteries for vehicles

The manufacturers of another battery type have a pilot program with the government of Mexico, wherein used EV (electric vehicles) batteries are placed in remote areas for storage of electricity generated by photovoltaic cells (Gifford 2000). The value for Li-ion batteries in such uses would be about that of Pb-acid batteries, $50 to 150/kWh. Moreover, the batteries would still be suitable for recycling after reuse. Adding another use phase could significantly improve the lifecycle economics of EV batteries. Although Li-ion batteries might be less suitable for remote applications because of control system requirements and possibly greater environmental impacts, other second uses might be appropriate.

Recycling makes economic sense if the revenues from recovered materials plus the avoided disposal costs are greater than the costs for collection and processing. One goal of battery recycling R&D projects is to develop processes that are economically viable on their own. However, there may be externalities – financial or nonfinancial (e.g., air quality) costs from disposal that accrue to society as a whole or to groups other than whoever is deciding the fate of discarded items. In such cases, a governmental agency sometimes makes regulations that force recycling even when it does not make economic sense. This changes the economics by internalizing the societal cost. The added financial burden can be transferred from the recycler to consumers, who should be considered responsible for safe end-of-life treatment of items they have used, by such means as deposits on new batteries. Drop-off fees are not advised, because they would encourage illegal dumping. Regulations akin to those in place for Pb-acid batteries and used engine oil would also be appropriate for encouraging returns. Auto wreckers and repair shops could also be given financial and regulatory incentives to return spent batteries for recycling. In Europe, product manufacturers are generally held responsible for end-of-life treatment; it is unclear whether this is the most efficient system for recycling.

Those recyclers that currently recycle Li-ion batteries charge fees for accepting material. These fees can be expected to decrease as the infrastructure for recycling and the markets for recycled materials are established. The consumer might pay a small fee to get rid of a battery, and then the person who collects a truckload of batteries might be paid for doing so. Sony expects its electronics battery recycling operation to be profitable with no drop-off charge, on the basis of the value of the cobalt recovered. Toxco is unsure whether automotive batteries would require a drop-off fee or if they would actually pay for the material. They currently charge to take Mn-based lithium batteries, but they might not need to do so with large volumes. This will depend on the quantity and reliability of this feedstock stream for their facilities, as well as on the recovery of other salable products (see Figure 7.4). Toxco is pondering recycling LiPF6, an expensive battery ingredient, and solvents. The LithChem salt product (not currently recovered as such from batteries) has 99.99% or better quality and is already approved (Miller 2000). Perceived quality of the recovered products is an important factor in the economics. For example, one North American battery manufacturer purchases raw materials only from Japan, in the belief that the purity is higher (Ridgway 1999). It would be necessary to persuade users of the quality of recovered products. The cost of Toxco’s operation was initially about $4.50/lb ($10/kg), but it has decreased to less than half that. With larger quantities of more uniform input, costs could be expected to decrease, and revenues increase, even more.

Even if there were a high drop-off fee or a payment of $1/lb ($2.20/kg), recycling costs or revenues would not significantly perturb the lifecycle costs of Li-ion batteries. The Li-ion battery pack for a typical EV weighs approximately 800 lb. Even if the battery sales price were to come down to the USABC goal of $150/kWh, a 30-kWh pack would cost $4,500, and recycling would amount to less than 20% of the initial cost. (In reality, it is expected to be even less.)