Understanding the growing world of battery recycling

The process is worth understanding mostly in order to see that it is not the differentiator. Packs arrive welded, with designs that vary by manufacturer, and have to be opened without breaching the cells inside, of which a Tesla pack holds something over 8,000. The cells carry unknown residual charge and, as they age or get fast-charged, accumulate what Steingart calls zombie lithium, metallic lithium deposited where a lithium-ion cell is not supposed to have any, which is a live hazard for whoever shreds it. After shredding you have black mass, and from there the two options are both inherited wholesale from ore processing. Pyrometallurgy burns it: cheap per unit and a guaranteed result, but capital heavy and with off-gassing nasty enough that the US has essentially stopped building smelters, while it remains, as Steingart understands it, the majority of recycling worldwide and common in China and India. Hydrometallurgy digests it in acid instead, and the trick that makes it practical for batteries is piranha solution, sulfuric acid with hydrogen peroxide, which cuts residence time from the roughly 90 days a copper leach pile needs down to hours and moves the whole operation into a closed reactor in a warehouse. Western recyclers are hydrometallurgical almost across the board.

Within that there is a real technical disagreement, and Steingart flags it as his own minority position. After digestion you can swing pH upward with sodium hydroxide and precipitate metals out in sequence, which is cheapest and needs fewer reactors, but is imperfect because metals mix in solution. Or you can use solvent extraction, where organic ligands are designed to grab specific metals and can be chained into circuits. Steingart prefers it, arguing from copper that the operating cost is far lower once it is running: a mine he visited in Morenci, Arizona needed crews walking miles of extraction loops twenty years ago and on a recent visit ran nearly unattended with daily pH checks. He is explicit that this is his experience rather than a settled result, and invites listeners to come at him with knives.

None of that decides who wins, which is the turn in the episode. The three large US players he takes on are three postures toward one hydrometallurgical base. Redwood Materials, on his reading, wants to be the mine of the future, on the view that the value is in controlling the input material rather than the process, because any downstream product faces margin pressure from battery makers who are themselves squeezed by their automaker customers. Ascend Elements innovates downstream instead, with a hydro-to-cathode process that deliberately skips separating the metals on the reasoning that the cathode you want looks a lot like the cathode coming in, needing mainly a nickel top-up as chemistries shift. Li-Cycle he calls the realpolitik of the three, coming from Hatch’s extraction equipment lineage and aiming simply to make the metal sulfates cathode manufacturers already know how to buy. But all three live on gigafactory scrap, which he understands to run over 20% of production, and that is the trap. Manufacturers have every incentive to drive scrap toward zero because it is pure waste, and we simultaneously want batteries to last as long as possible, so the end-of-life stream is deliberately slow in arriving. The two curves leave a gap, and every recycler has to survive it.

What happens after the gap closes is not obviously better. Automakers will want to control their own material, Tesla largely does already, and the others will follow as their fleets age, which leaves recyclers as tollers: paid to process somebody else’s material, competing on process efficiency alone. In a reasonably efficient market, an advance that lowers recycling cost buys a year or two of extra profit before the market prices it away, and the pressure for cheaper batteries guarantees it will. This also answers a question Steingart says he asked himself: why the big miners are not seriously in this. Their value sits in what they own in the ground, and their processing exists to monetize that; in recycling, the feedstock is either factory scrap or somebody else’s product, so there is nothing for them to own. Chemistry is making it harder rather than easier, because the output has to beat a benchmark metal price and the industry has swung back toward lithium iron phosphate, where lithium is the only comfortably valuable component, phosphorus has little recycled value today, and conventional digestion barely makes sense. The one opening he sees there is direct recycling, refurbishing the cathode rather than breaking it down, which suits lithium iron phosphate because the material changes little as it cycles. He notes in the same breath that he is publicly skeptical of direct recycling and thinks it is a bad idea for nickel chemistries, where breaking material down to sulfates and rebuilding is cheaper and safer.