Battery recycling remains uneconomic in Europe
A study by HHL Leipzig Graduate School of Management has found that recycling end-of-life electric vehicle batteries currently results in losses, largely because hazardous-goods transport and dismantling add substantial costs. The researchers estimate that making recycling economically viable could require changes to battery design, logistics, dismantling, and business models.
There are no major technological barriers to recovering materials from end-of-life electric vehicle batteries, and existing recycling processes are mature. The economics remain challenging, however, according to a study by HHL Leipzig Graduate School of Management: if a recycling company sells the materials recovered from a battery pack at market prices, it incurs a loss of around EUR 1.90 per kilogram of battery pack after all costs are deducted.
The researchers identify the classification of end-of-life batteries as hazardous goods as the main reason. Transporting them costs an average of 16 times more than transporting conventional freight. Dismantling costs also weigh on the economics, while uncertainty over material composition and recovery rates adds further costs.
The economics could also affect battery prices. From August 2031, the EU Battery Regulation will require minimum shares of recycled raw materials in new electric vehicle, industrial, and starter batteries. Assuming a recycling rate of 20% and passing the recycling companies’ losses directly through to the required recycled-material share, the HHL researchers estimate that a battery pack would become around 6% more expensive.
Business models
The research team says costs could be reduced through safer battery designs, shorter transport distances, binding standards, greater use of automated dismantling, and increased specialization among recycling companies. Together, these measures could cut recycling costs by around 34%, according to the study. The current loss of €1.90 ($2.21)/kg of battery pack would instead become a profit of €0.13/kg.
The Leipzig researchers also point to a distribution problem. Battery values would increase if they were used as stationary storage systems after their automotive service life, with the research team estimating a 64% increase in value. However, that benefit would accrue to vehicle owners and storage operators rather than the manufacturers responsible for recycling costs or the recycling companies themselves.
The HHL researchers therefore propose new coordinating entities that would manage battery packs across both stages of their life cycle, distributing costs and revenues more evenly among the parties involved.
Such companies would own the battery packs and the materials they contain, said study leader Dima Smirnov, a postdoctoral researcher at HHL’s Chair of Innovation Management and Entrepreneurship. They could create market pressure for innovation in upstream processes while also distributing the value generated by second-life applications more fairly. Europe therefore needs not only better battery processes but also market-based business models that make circularity economically viable, Smirnov said.
HHL conducted the study as part of SAFELOOP, an EU-funded consortium project focused on developing safer and more sustainable battery technologies for electric vehicles. The project covers the entire battery life cycle and aims to improve safety, sustainability, and competitiveness through new approaches to material supply, development, use, and recycling.
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