The lithium-ion batteries market, a major component of EVs, is expected to grow significantly in the next five years as India’s EV market expands.
Total EV sales in India stood at 365,920 units in 2018 and are expected to grow annually at 36% till 2026 with support from the government, according to India Energy Storage Alliance (IESA).
Though the government is promoting mass adoption of EVs and lithium-ion batteries to tackle pollution and cut its crude oil import bill, the reserves of the raw materials used in lithium batteries are concentrated only in some regions of the world, mostly away from India. This makes it imperative for India to recycle these precious materials, since it is entirely dependent on imports.
The battery market in India
These batteries contain five primary metals – aluminium, copper, cobalt, iron, and lithium. Typically, it is these five key metals that constitute 50-60% of the cost of lithium-ion batteries. Therefore, any fluctuation in these metal prices will lead to an increase/decrease in the overall cost of batteries.
Lithium-ion batteries are preferred today due to several reasons, including high energy density, capability to withstand a high number of regeneration cycles and temperatures, favourable discharge resistance, and a relatively low environmental impact, compared to other batteries.
“At the end of life (EOL) of the Li-ion battery, these metals in the battery cells (Li, Ni, Co) must be recycled efficiently – as they are critical and can be used again for making cathode materials in new cells (=battery) without losing properties and support closing the loop. This compliments the primary supply of Co, Ni and Li and will help in urban mining,” said Kedar Rele, Director and General Manager – India, Umicore India to The Blue Circle. The company forged a partnership with MG Motor India in 2019 for recycling their end-of-life batteries for the ZS EV.
According to JMK Research, currently, about 65% of lithium-ion batteries are used in the telecom sector, data centers, street lights, and other small consumer applications, while the remaining 35% market is held by the electric vehicles segment. However, by 2030, the share of electric vehicles is expected to increase to 80% on the back of Indian government’s push towards electric mobility.
Several companies are looking at battery swapping as a solution, but it can’t be used in the long run for mass EV adoption. With the development of fast-charging stations, battery swapping is expected to fade away. However, battery recycling and the second use of battery will open new opportunities in the automotive industry in the coming years.
Reuse of spent batteries
Battery manufacturers are devising strategies to set up huge plants in India, and produce affordable batteries, so that EV adoption is further accelerated. However, it is important to consider the limited life of these batteries and where they would end up once they are spent.
Then there is a scarcity of materials used in lithium-ion batteries. According to Bloomberg New Energy Finance, the global consumption of lithium-ion battery raw materials such as cobalt, lithium, and copper is expected to increase 20 times by 2030.
Since the raw materials are not easily accessible, there’s a lot that goes into transportation, which increases the carbon footprint. Usage of recycled materials can reduce the CO2 emissions from the production cycle by up to 90%.
The best way to treat such batteries is to recycle the metals and other natural resources from a spent battery using different mechanical and metallurgical processes. These precious extracts can be re-used to manufacture more batteries.
“As the EV pace picks ups, a sustainable circular economy would be crucial to ensure that end-of-life batteries are responsibly reused and recycled. Recycling ensures that we are protecting the environment from the piling up of wastes in landfills, reducing the pressure on mining for the scarce metals such as Lithium and Cobalt as well as reducing carbon footprint, “said Dr. Richard Lobo, Head Corporate Strategy, Tata Chemicals to TBC.
India cannot miss the battery recycling bus
Currently, India is in an early phase of EV adoption, but the problem will rise in the coming years, once the first batch of EVs in the market will be at the end of their life cycles. With reuse and recycling, the demand for battery materials can be controlled. Otherwise, the price of battery materials will continue to rise with the rising demand for EVs.
“As we move towards mass EV adoption, we should in parallel start working on setting up the entire recycling chain right from collection, transportation and recycling and end refining. It will stand critical for true success of EVs and recycling of EOL of battery cells. Time is now!!” added Kedar.
Suzuki, Toshiba and Denso formed a partnership in 2018 to manufacture lithium-ion batteries in India. In the initial phase, the consortium invested Rs 1,214 crore to produce lithium-ion batteries which are expected to be in production by 2020. In the next phase, it is investing Rs 4,930 crore and working with the Gujarat government on recycling of materials such as lithium, nickel, cobalt and manganese.
Another giant, Tata Chemicals started operations of a battery recycling plant near to Mumbai in September 2019 and is trying to scale up battery recycling to 500 tonnes per year.
“At Tata Chemicals, we recycle Li-ion batteries of all forms – from consumer electronics to Energy Storage Batteries to EVs, leveraging our deep understanding of chemistry and ensuring environmentally safe operations resulting in Zero Liquid discharge, Zero Solid wastes. We have achieved a 99% purity of extracted Lithium, Cobalt, Nickel and Manganese, in the form metal salts. We view this as a vital step in delivering sustainability and protecting the environment,” added Richard.
Mahindra Electric is also interested in setting up a battery manufacturing plant with a recycling facility.
There are other players such as Exigo Recycling, who are already recycling lithium-ion batteries from electronic wastes.
“It is a very well-known fact that anything to do with electronics, recycling is critical. It has been understood by the country only in this decade that battery recycling is important. So, twice the e-waste laws have come in. The government has been wise in putting up the battery draft rules for that matter. Regarding EV batteries, they have made it mandatory that even before rollout you need to have battery recycling in place, “ said A.L.N Rao, CEO, Exigo Recycling – India to TBC.
The company is focused on introducing future concepts and staying ahead of the curve.
“We have already come out with a solution for puff recycling, which is not available in the country. We are coming out with a very low cost high yield EV battery recycling, and also introducing precious metal refining or rare earth metal refining. We are also planning to come out with a sampling lab for the very first time in the country for PCBs” added Mr. Rao.
Exigo will also be announcing the first carbonation plant that converts waste to energy, where 35-40% power requirements of the plant would be generated within the plant itself.
Opportunities In second-use of battery
Another solution is to reuse batteries after they are removed from EVs. According to the National Renewable Energy Laboratory (NREL), a battery’s second life can be extended for up to 25 years.
In most cases, EV batteries boast a lifetime of 8-10 years. After that, the capability of the battery is not completely diminished, which is why India has a huge opportunity for the second-use of a battery in low-grade applications.
This battery can be reused for power backups, renewable energy storage and off-peak energy storage before being disposed of.
However, the second use of batteries also comes with its challenges. There is no proper regulation and standards for such use-cases and only the synergistic efforts of government and industry players will be able to address these issues.
The way forward
As per JMK Research estimates, the recycling market in India is expected to pick up from the year 2022 onwards when lithium-ion batteries which are presently in use would reach their end of life. In the year 2030, the annual recycling market is expected to be around 22 – 23 GWh, which is a USD 1,000 million opportunity.
Richard said, “Recycling not just provides for prudent management of resources and saving the environment – both from environmental disruption from mining for the resources as well as waste ending up in landfills, it also provides for meaningful employment along the value chain, strengthening the local economy.”
The stage is set – it’s all a waiting game now!