Does the circular economy make business sense for electric vehicle (EV) batteries? The environmental benefits of recycling or reusing batteries are clear—among them, better use of resources and lower carbon emissions. But the business case is less straightforward.
the analysis found that the economics of EV battery recycling at scale is attractive, but generating profits from reuse—known as “second life” applications—will be much harder. We believe that direct-to-recycling is likely to be the favored route in the circular economy in the near term. Despite the availability of used EV batteries and demand for energy storage solutions, second-life batteries are unlikely to represent an important share of the power supply market for the foreseeable future.
The softly spoken engineer is often considered the brains behind Tesla: it was Straubel who convinced Elon Musk, over lunch in 2003, that electric vehicle had a future. He then served as chief technology officer for 15 years, designing Tesla’s first batteries, managing the construction of its network of charging stations, and leading the development of the Gigafactory in Nevada. When he departed in 2019, Musk’s biographer Ashlee Vance said Tesla had not only lost a founder but “a piece of its soul”.
Straubel could have gone on to do anything in Silicon Valley. Instead, he stayed at his ranch in Carson City, Nevada, a town once described by former resident Mark Twain as “a desert, walled in by barren, snow-clad mountains” without a tree in sight.
At first glance it is not the most obvious location for Redwood Materials, a start-up Straubel founded in 2017 with a formidable mission bordering on alchemy: to break down discarded batteries and reconstitute them into a fresh supply of metals needed for new electric vehicles.
His goal is to solve the most glaring problem for electric vehicles. While they are “zero-emission” when being driven, the mining, manufacturing, and disposal process for batteries could become an environmental disaster for the industry as the technology goes mainstream.
As sustainability becomes increasingly important to customers, investors, regulators, and employees alike, automakers are coming to recognize that the next generations of automotive products must be successful both commercially and environmentally. To enhance sustainability, they are making improvements to their products and manufacturing processes. Their products now offer higher fuel economy, higher levels of recycled content (beyond aluminum and steel, which are already heavily recycled), and sustainably sourced materials (such as wood and leather). To lower the carbon emissions of their manufacturing processes, they are producing vehicles by using renewable energy, optimizing energy needs, and reducing waste and the amount of water they use.
If the circular economy takes root, today’s status quo will look preposterous to future generations. The biggest source of cobalt at the moment is the DRC, where it is often extracted in both large industrial mines and also dug by hand using basic tools. Then it might be shipped to Finland, home to Europe’s largest cobalt refinery, before heading to China where the majority of the world’s cathode and battery production takes place. From there it can be shipped to the US or Europe, where battery cells are turned into packs, then shipped again to automotive production lines.
All told, the cobalt can travel more than 20,000 miles from the mine to the automaker before a buyer places a “zero-emission” sticker on the bumper.
Despite this, independent studies routinely say electric vehicles cause less environmental damage than their combustion engine counterparts. But the scope for improvement is vast: Straubel says electric car emissions can be more than halved if their batteries are continually recycled.
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