2021 has been a banner year with over $1.5 Billion in investments to recycle lithium batteries!
Here is the break down:$580 Million to Li-Cycle when they merged with PDAC
$100 Million to Li-Cycle from Koch
$700 Million raised by Redwood Materials
$50 Million injected to Redwood Materials by Ford
$70 Million raised by Battery Resourcers
$39.1 Million raised by American Battery Technology Company
It is now official – industry has embraced the idea that lithium-ion batteries can and will be recycled back into feedstock to build new batteries. Ford Motor Company has chosen to work with Redwood Materials, General Motors has partnered with Li-Cycle and Honda has paired with Battery Resourcers. The service providers have facilities in operation today and have been infused with fresh capital to help them meet the growing demand. The companies have a combined new investment of over $1.5 Billion to build out new facilities and support business growth.
Taking waste materials from the manufacturing process as well as capturing end-of-life batteries makes financial and environmental sense. Due to the high cost and impact of mining new material, recycling batteries to make new batteries provides an economical way to recapture battery metals into their purest forms while diverting the products from our landfills.
Battery recycling also assists with an expected shortage of raw materials over the next decade coupled with the need to provide a domestic supply of lithium. Policy is being formed to support the industry which will cement the trajectory of the initiatives so that the entire electric vehicle automotive industry will be required to recycle all of their waste.
Several other companies are moving forward with their plans to recycle lithium batteries and it is assumed that there will be such a shortage of material that all companies will have no problem finding buyers of the refined products once produced.
American Battery Technology Company is breaking ground on their new construction pilot facility in Fernley, Nevada. Other companies have established technology hubs to test their processes and plan to build out as well.
Investors are valuing these companies in multiple billions of dollars as the value of Lithium is extremely high. Some automakers are handling recycling in-house – such as Tesla and Volkswagen while others will partner with service providers. For example, Ford invested $50 million into Redwood Materials as part of their partnership – proof of the need for their service as a partner.
Investors are searching for opportunities to get in early – and there are several companies that trade their stock on public markets. While most are still “penny” stocks, (such as ABML, AMYZF, SXOOF and LODE). Li-Cycle recently went public via a SPAC. They trade as LICY. (I have traded in and out of several of these companies). The stocks have experienced wild price swings as most do not have operational plants and revenue yet. LICY has operational revenue.
Environmentally speaking, Li-Cycle and American Battery Metals Corporation seem to have a better mousetrap as they process their battery material in a non-thermal fashion whereas all other known companies use a thermal smelting process. Because of this, there are fewer air emissions and less material shrinkage as smelting can burn off products.