This piece is part of a series. Read more.

How to prepare for the coming flood of used EV batteries

Here are four policy ideas to help the U.S. start developing a nationwide system to reuse and recycle electric vehicle batteries.
By Julian Spector

  • Link copied to clipboard
A man with black hair wearing a face mask works on a stack of bright green used EV batteries
Steven Chung, co-founder of ReJoule, prepares used electric vehicle batteries to be tested. (Paul Bersebach/MediaNews Group/Orange County Register via Getty Images)

Supported by

Canary Media thanks Solarcycle for its support of the Recycling Renewables series.

Last year, battery-powered cars made up 8.6 percent of global new car sales, a trend that is only set to continue as prices come down and their technology improves. The White House wants half of all new vehicles sold in 2030 to be electric; Europe is advancing a ban on sales of combustion cars by 2035, while California has an executive order with the same target.

This wholesale shift to clean vehicles is a crucial step toward tackling planet-warming emissions, but it will also generate tremendous amounts of used lithium-ion batteries — and countries need to plan for that or suffer the consequences.

I recently wrote about the technical innovations driving down the costs of battery recycling and scaling up capacity. But better techniques, however promising, are not enough to ensure robust reuse and recycling of lithium-ion batteries. That’s because a comprehensive recycling system requires coordination among numerous parties, including carmakers, mechanics, power plant developers, transportation and logistics specialists, and hazardous-waste disposal firms. That won’t happen on its own, but it could be spurred by government intervention to give these industries clarity on where they should compete and innovate.

You have a product that, at its end of life, is considered hazardous waste, and you have to figure out what to do with this hazardous waste,” said Alissa Kendall, an industrial ecologist and battery recycling expert based at the University of California, Davis. Right now, we don’t have any policies for managing these technologies at their end of life.”

Done right, recycling policy could establish a clear pathway for electric vehicle batteries to get reused and eventually recycled, safely and economically returning their critical minerals to the supply chain for new batteries. This would support fledgling markets for battery recycling and the reuse of lightly used batteries. Done wrong, old batteries will slip through the cracks, potentially harming people and the environment, and forcing manufacturers to harvest even more new material from the earth at great cost to local landscapes and the climate.

Recycling startups insist that lithium-ion recycling is becoming more profitable, but it still costs manufacturers money to collect battery packs and safely send them to recycling facilities. Without guidance on who’s responsible for spent batteries, manufacturers may not take the initiative.

So far, state and federal efforts to develop and implement effective EV battery recycling policies have been almost nonexistent in the U.S. California is furthest along in formulating a strategy. In 2018, it passed AB 2832, which created an advisory group to study how to ensure as close to 100% as possible of lithium-ion batteries in the state are reused or recycled at end-of-life in a safe and cost-effective manner.” The advisory group published its draft report this year, and lawmakers could turn those suggestions into legislation as soon as next year’s session.

We clearly need a plan for these batteries once they reach their end of life, including looking at ways to use them as energy storage to power our homes,” Assemblymember Phil Ting (D-San Francisco), who sponsored the 2018 legislation, noted in an email to Canary Media. I appreciate the work of the advisory group and will keep in mind their policy recommendations later this year when I craft my 2023 legislative package.”

Today, the number of battery packs in need of disposal is relatively small because we’re still in the early days of EV adoption. But the surge of spent batteries is coming, whether the U.S. is ready for it or not.

Here are four sensible policy ideas that, if implemented, would eliminate hurdles to battery recycling and give a significant boost to the nascent industry.

1. Decide who’s responsible for spent EV batteries 

Someone needs to be held accountable for making sure lithium-ion batteries don’t end up abandoned to rust or catch fire. The Occam’s razor approach would be for the government to tell auto manufacturers that if they bring a battery into this world, they must dispose of it, a principle known as extended producer responsibility.” The European Union went this route with its proposed battery regulation, which is still winding its way through the bureaucracy.

Automakers tend to bristle at this approach because they say forcing them to pay for disposal will raise the price of EVs. Setting aside what this means for corporate profits, EVs are already too expensive for many consumers, so it’s possible that a rule like this could further impede the mass adoption of low-carbon transportation. The price tag of EVs raises particular equity concerns for jurisdictions that are pushing for widespread EV adoption by their constituents.

But manufacturers aren’t the only ones who object to the idea of funneling used batteries through auto manufacturers. The automobile dismantling and recycling industry also has something to say about it. That’s the collection of companies that break down and recycle some 4 million vehicles annually in the U.S. and Canada, finding new homes for the functioning pieces and recycling the leftover metals. The industry generates $32 billion in sales annually, according to the Automotive Recyclers Association industry group.

They are effective at wringing out value from these end-of-life vehicles,” Kendall said.

The dismantling industry is already facing seismic shifts as cars transition from combustion engines to electric drivetrains, drastically changing the roster of parts that can be extracted from vehicles. If the U.S. follows Europe’s lead and makes auto manufacturers responsible for their old EV batteries, that could cut the dismantlers out of the most valuable piece of a used EV: the battery pack.

When California’s advisory group voted on a series of different ideas, a strong manufacturer takeback policy garnered 67% support.

But the group — which included representatives from car companies, salvage firms, battery recyclers and more — voted 93% in favor of a hybrid approach to assigning responsibility. In this version, dismantlers can take ownership of a used EV, but doing so makes them responsible for the proper disposal of battery packs. If no licensed dismantler claims a particular battery pack, the manufacturer has to step in as a last resort.

This proposal also creates a core exchange” modeled after an existing nationwide system for trading in old engines and car parts. When mechanics remove a battery pack, they must prove the old battery is properly disposed of. The exchange system tracks those packs, like a fancier version of the glass-bottle deposit at grocery stores.

Both policies also require further consideration to define what constitutes proper recycling’ and how it should be verified,” the advisory group report states.

2. Streamline diagnosis and transportation

After determining whose job it is to make sure batteries get recycled, governments could do a lot of little things to make the whole process run smoother, starting with how the batteries are transported from one place to another.

When a pack is removed from an electric car, it’s not clear to the casual observer just how beat up the battery is. Severely degraded batteries could become a fire hazard, while gently used ones typically don’t pose a threat. But since it’s impossible to know the battery’s state just from looking at the thing, all used batteries are considered hazardous by the U.S. Department of Transportation.

Hazardous materials incur extra costs to ship safely. Damaged batteries need even more specialized and expensive shipping techniques. Studies have found that the transporting of batteries alone accounts for 40 to 60 percent of battery-recycling costs. And those costs compound if batteries need to be picked up and sent somewhere for examination, and then sent somewhere else to be repurposed or recycled.

If you have to ship batteries to get diagnostics, that’s an enormous additional cost,” Kendall said. Wouldn’t it be great if, as soon as a battery came out of a car, you knew exactly what to do next with it?”

Policymakers could require that manufacturers display a battery pack’s state of health,” which is the metric for how much capacity remains. If a pack still has 90% of its original capacity, it could be used in another car. If it has 80% or less, it may be better suited for duty in a power plant, storing clean energy for the grid. If it’s much more degraded, it may be time for it to head to the recycling shop.

This sort of universal diagnostic system” would be akin to the onboard diagnostics that now come standard in all cars — no matter what make or model, you can scan the car to check for faults or failures.

The trick is deciding just how much should be disclosed. California’s advisory group preferred more general battery labeling: 93% of its members supported a physical label with items like manufacturer name or cathode chemistry. Universal diagnostic systems drew considerably less support.

Any labeling scheme would benefit from federal action, as opposed to a state-by-state patchwork of policies, said Blaine Miller-McFeeley, senior legislative representative for nonprofit law firm Earthjustice.

If you want to take a battery across state lines to recycle it, you want the standards and the labeling to be the same everywhere,” he said.

Another area for federal action is refining the transportation rules for batteries to make shipping easier without sacrificing safety. Startup KULR found a way to navigate current regulations by getting a special permit to ship batteries in its high-tech fireproof cases.

3. Encourage reuse where possible

In theory, batteries coming out of cars can perform years of extra service storing power for the grid. But assessing and calibrating second-life storage is more complicated and unpredictable than buying brand-new, warrantied batteries; it’s only worth the hassle if it’s cheap enough to justify the added effort.

B2U Storage Solutions’ project in Lancaster, California proves that this can be commercially viable at scale — it now stores up to 17 megawatt-hours, with more capacity on the way. The startup self-funded the project as a merchant power plant to demonstrate that old EV batteries could be harnessed profitably for storing clean electricity.

B2U’s business model is to compete in the wholesale markets with batteries that cost less to install than brand-new lithium-ion. But in this early stage of the second-life market, supplying a project like this necessitates tracking down manufacturers willing to sell small quantities of old battery packs, or snapping them up from auctions run by insurers of damaged vehicles. B2U secured enough for its power plant, but there’s no central marketplace where these transactions can take place at a scale commensurate with the demand for grid storage.

Any policy to streamline transportation and diagnosis of used EV batteries reduces costs for second-life projects. But policymakers could also take steps to centralize the stock of used batteries and make it easier for enterprising reusers to acquire them. California’s proposal for a battery exchange program could serve that role.

And any subsidies for energy storage could include used batteries as well as new ones. California’s current incentive program that helps homeowners and others install distributed batteries, the Self-Generation Incentive Program, only makes new batteries less expensive, which dampens the cost savings from reusing batteries.

4. Require recycled content

The EU’s proposed EV battery regulation goes beyond mandating manufacturer responsibility for batteries at their end of life. It would set mandatory recycling rates for battery materials and require minimum levels of recycled content in new battery manufacturing by the end of the decade.

If it’s adopted, it would send a clear signal to would-be recyclers that if they build capacity, someone will buy their output.

Building a strong battery recycling sector within a country serves multiple goals. It strengthens the domestic supply of minerals that are critical for national security, for instance. But it also serves environmental-justice goals by lessening the need for new mining, said Earthjustice’s Miller-McFeeley.

The impact of hard rock mining on frontline communities, especially Indigenous communities, has such a toxic legacy and will continue to be toxic unless we do this transition in the right way,” he said. Recycling is far less impactful to frontline communities.”

There are multiple ways to craft such a policy. Legislation at the state or federal level could create a tax credit for new batteries that contain a certain percentage of recycled materials. A bolder move would be to require a certain reuse threshold, as Europe plans to. The executive branch could also tackle this through procurement policy by stipulating that electric vehicles bought by the government contain recycled minerals.

California’s advisory group considered recycled content standards, but the idea did not win enough support to be officially recommended. “​Those who opposed these policies by and large believed that recycled content and material recovery rates provide valuable guidelines and goals for industry development, but more research is required to identify feasible targets and understand their economic impact,” the report notes.


Solarcycle is proud to support Canary Media’s Recycling Renewables series. Solarcycle offers solar asset owners a low-cost, eco-friendly, comprehensive process for retiring solar systems. We pull out valuable metals such as silver, silicon and aluminum and have the technology to recycle 95% of panels currently in use. Follow Solarcycle on LinkedIn as we ramp up to meet this pivotally important challenge at giga-factory scale.

Julian Spector is a senior reporter at Canary Media. He reports on batteries, long-duration energy storage, low-carbon hydrogen and clean energy breakthroughs around the world.