Electric vehicles (EVs) are driving the rise of battery manufacturing, with global demand of EVs expected to increase significantly—4.5 times by 2030 and 7 times by 2035. New emerging markets and developing economies (EMDEs) are playing a growing role and are expected to make up 10% of global demand by 2030. Europe and North America are leading investments in battery manufacturing due to investments based on current policies and if current climate pledges are fulfilled, further diversification is expected in EMDEs other than China.

In the next decade, recycling will be critical to recover materials from manufacturing scrap and to recycle end-of-life batteries and reduce critical minerals demand, particularly after 2035, when the number of end-of-life EV batteries will start growing rapidly. If recycling is scaled effectively, recycling can reduce lithium and nickel demand by 25%, and cobalt demand by 40% in 2050, in a scenario that meets national climate targets. Scaling up recycling facilities and increasing collection rates of end-of-life batteries will be essential. Currently, China dominates global recycling capacity, but Europe, North America, and emerging markets are scaling up efforts to establish regional facilities and secure material supply.

Most battery recycling facilities have been planned next to battery manufacturing facilities because the main source of recycling feedstock this decade is expected to be manufacturing scrap (accounting for two-thirds of available stock in 2030). End-of-life EV and storage batteries are anticipated to become the main recycling feedstock only after 2035, representing over 90% of available stock by 2050.

Policymakers are key to ensuring a sustainable battery supply chain. The EU Batteries Regulation, for instance, mandates recycling efficiency targets and promotes the use of recycled materials. Meanwhile, initiatives like the global battery passport aim to enhance transparency in sourcing and recycling processes.

Scaling battery recycling and production in emerging markets will reduce dependency on primary resources and create new economic opportunities. Advanced economies can support these efforts by promoting technology transfers, developing infrastructure, and facilitating the trade of second-hand EVs to boost accessibility in lower-income regions.

In conclusion, sustainable EV battery supply chains are crucial for achieving global climate goals. Through innovation, recycling, and international collaboration, the EV sector can mitigate its environmental impact while driving clean mobility. To discuss sustainability and recycling in battery manufacturing material supply chain, meet with solution providers and hear talks from industry leaders, attend the 3rd European Battery Gigafactory Summit: Advances in Planning, Engineering and Operations taking place in Berlin, Germany on May 14-15, 2025.

For more information, visit our website or email us at info@innovatrix.eu for the event agenda.

Source:

International Energy Agency