One year update: Redwood’s California EV Battery Recycling Program

In February of last year, Redwood launched the world’s first and most comprehensive electric vehicle battery recycling program, in California, with the support of Governor Newsom and several automotive partners. Our goal was to establish efficient, safe and effective recovery pathways for end-of-life hybrid and electric vehicle battery packs to be recycled and share our findings. Over the past twelve months, we worked with partners including Toyota, Ford Motor Company, Volvo Cars, and Volkswagen Group of America as well as dismantlers to collect and recycle lithium-ion and nickel metal hydride (NiMH) vehicle batteries.  

California is a longstanding leader in the transition to electric transportation and, as a result, is the oldest and one of the largest electric vehicle markets globally, with EVs compromising nearly 19% of all new car sales in the state in 2022. As the first wave of these vehicles begin to retire from roads, California’s management of end-of-life battery packs will serve as a model for other states and the battery recycling industry.  

Today, we share a year’s worth of findings in hopes of demonstrating the value of end-of-life (EOL) packs, identifying gaps where the industry may need support, and aiding policymakers as they begin to make critical decisions on how best to responsibly manage EV batteries at end-of-life.  

Working directly with auto dealers, dismantlers, and aggregators in California, we were able to identify and recover 1,268 end-of-life packs, totaling approximately half a million pounds of material. Of the packs we collected, less than 5% were “Damaged, Defective or Recalled” (DDR). We safely packaged, transported, and recycled all batteries at our facilities in neighboring Northern Nevada. From the recovered metals, we’re already beginning to produce high-quality battery materials, anode, and cathode, that can be returned directly to U.S. battery cell manufacturers.  

The packs we collected were a mix of older NiMH and newer lithium-ion chemistries from more than a dozen different automakers. We expect mixed chemistries to continue as older, hybrid vehicle models now reaching end-of-life continue to retire in greater numbers from California roads. However, lithium-ion represented the majority of the chemistry types collected and we expect it will continue to grow as it is now the only type of vehicle battery on the market.  

The most significant cost of battery pack collection and recycling is logistics. The key to reducing logistics costs for end-of-life battery packs is to achieve economies of scale through increased collection volume and Redwood is confident that, in time, as EOL pack volumes increase, the logistics cost will decrease so that batteries will become assets that will help make EVs more sustainable and affordable in the long run. Today, Redwood’s recycling process is already profitable for smaller batteries, such as those found in consumer devices, and production scrap. As logistics becomes a smaller component of the overall value proposition, we anticipate a similar trend to happen for larger electric vehicle batteries in the coming years. 

We also worked closely with auto dismantlers, which are core to creating the safest and most efficient recycling pathways. The Automotive Recyclers Association (ARA) and California Auto Dismantlers and Recyclers Alliance (CADRA), in particular, have been incredible partners and we look forward to continuing to work with them and their members to safely and sustainably continue to scale pathways for end-of-life EVs. Everyone we worked with in the dismantler community wants to do the right thing and they were excited to partner directly with Redwood to ensure responsible recycling. The dismantler community helped us to establish the most efficient transportation routes and aggregate batteries at their central locations and in return, they were appreciative of the knowledge we shared on handling, packaging and transporting EV packs.  

Redwood is supportive of public policies that govern the safe collection, transport and handling of EV packs and would encourage the industry and policymakers to focus on lowering transportation costs without compromising safety. Existing regulatory frameworks were not intended to address recycling pathways for large electric vehicle battery packs. This is a major opportunity to update these regulations to address the modern EV era while continuing to ensure the safe collection and recycling of these packs, without adding additional fees that could inadvertently increase the costs of EVs. 

There’s a strong willingness from vehicle OEMs to responsibly manage their EV batteries, as evidenced by Redwood’s partnerships with automakers in this pilot. An Extended Producer Responsibility (EPR) approach could be effective but it's essential that any such policy allows automakers to partner directly with recyclers or recycle the batteries themselves. This is paramount to ensure the market manages EOL batteries in the safest and most efficient manner, while avoiding unnecessary costs to the battery value chain. It also presents an opportunity for the industry to drive down the costs of future domestic battery production and pass those savings to consumers. 

However, mandating a singular Producer Responsibility Organization (PRO) for EV battery recycling, similar to certain e-waste frameworks, is not the appropriate solution for end-of-life EV battery packs. Instead, Extended Producer Responsibility programs can ensure best practices and responsible EOL management without choosing winners and losers.  

Automotive OEMs must also collaborate directly with recycling partners who can sustainably manage the materials throughout the supply chain, collecting and recycling end-of-life lithium-ion batteries and then refining the materials sustainably into “battery-grade” metals that can go directly back into battery component production. It is essential that recyclers have the capability to produce “battery-grade” refined metals. Without this capability, we will end up with a chain of recyclers producing only intermediates, adding to costs, and increasing the likelihood that critical materials could end up overseas instead of being reused in batteries to support the United States’ electrification goals.  

Our ability to effectively recover a high percentage of metals (~95%) and, in turn, produce downstream battery components from that recycled content demonstrates not only the need for qualified recyclers to manage these batteries but also a clear solution that both addresses EOL batteries and ensures material for future EV production. The value of end-of-life batteries lies in ensuring responsible recycling, and any proposals or actions that add extra costs to the EV battery value chain will put both California and the United States at a competitive disadvantage during this critical period of transition toward clean energy and electrification. 

The Inflation Reduction Act (IRA) recently incentivized stringent critical mineral and battery component requirements for EV batteries.  To comply with these new requirements, battery makers and automotive manufacturers will need a reliable, domestic supply of both recycled content and battery materials. Our program demonstrates the strong market for these materials within the U.S., especially considering the recent expansion of the Clean Vehicle Credit through the IRA. 

With a year’s worth of knowledge and counting, it is clear that the market economics for EV battery packs and the valuable metals they contain provide an increasingly strong incentive for responsible end-of-life management. As policymakers across the nation consider proposals to ensure responsible EOL management of batteries, we encourage them to incentivize responsible recycling here in the U.S., similar to the policies established by the IRA.  We also urge policymakers to be mindful that, while still in the early stages, market forces and industry partnerships are already at work to create safe, efficient, and sustainable pathways for end-of-life batteries.  

As a nation, our focus should be on increasing EV adoption, which requires lowering EV costs so that they are widely accessible to all communities.