Our analysis on EV battery volumes – 3 takeaways

the chinese wave, a pool of batteries for reuse and how the EU battery regulation becomes a challenge for domestic manufacturers

This week Circular Energy Storage published the latest update of the light duty electric vehicle (LEV) battery volumes 2022 to 2030 on CES Online. From batteries being placed on the market to what will be available for reuse and recycling.

We also published a 19 page report providing in-depth details on methodology as well as analysis of the current and future market and regional differences.

We have spent four months collecting, verifying and analysing the data which, like our previous datasets, is built entirely bottom up, based on the actual batteries in LEVs placed on the market in the whole world from 2009 until 2022.

Our forecast to 2030 is built the same way, with predictions for individual car models and their batteries. This enable us to go deep into battery specific data such as capacity, weight and chemistry but also characteristics of the vehicles such as their manufacturing location, price on the secondary market, trading pattern, battery replacement frequency etc. Together with our solid knowledge about the reuse and recycling market it all help us to make informed estimates of how, where and when the batteries will be reused and recycled.

Worth highlighting in this update are three important conclusions:

1. China’s importance as EV manufacturing country is increasing rapidly. 67% of the world's LEV's placed on the market in 2022 were produced in China. This will only increase, both due to continued growth in the domestic market but also for exports to especially Europe and emerging EV markets. Combined with the country's dominance in the upstream value chain this will have a big impact on everything from battery production to other brand's ability to defend their market shares. It also has an effect on which type of batteries that will be placed on the various markets. It will put pressure on the European recycling market with smaller volumes of scrap from cell and pack manufacturing as well as more direct competition from the Asian end-of-life market.

2. There is a rapidly increasing volume of batteries available for reuse. These battery typically find their ways to various use cases which often are different from the most common narratives and usually very fragmented. There is a big opportunity for reuse companies to address this market which over the next 8 years will amount to 70 GWh in Europe and 49 GWh in the US. The main challenge, and opportunity, here is not so much related to technology but much more around consolidation, logistics and to design business models that can benefit the whole value chain.

3. Requirements on recycled content in the EU are set to have negative effects on the European battery industry, locking out players which will not be able to comply. Based on our forecast, in 2030 end-of-life batteries available for recycling from the European LEV market will only make up 2.2% of the batteries being placed on the same market, in vehicles produced in Europe. That will make it impossible to meet the material requirements proposed in the EU battery regulation.

However for Chinese car makers, which have access to a both larger and a more mature recycling market, the share bumps up to 9.75%. Producing vehicles in a market which doesn’t have the same requirements as the EU, Chinese battery and car makers can concentrate batteries with recycled content to cars for the European market. Added to that, by predominately using LFP batteries there is no need for China-made vehicles to comply with requirements on nickel and cobalt content.

Of course large recalls and scrap from battery manufacturing will also be an even more important, source of recycled materials and may help European battery material makers to reach the requirements. But this material will of obvious reasons be kept tightly by those who produce it. This has so far been very clear in both the large recalls we see today and production scrap from Korean battery makers where most of the material goes back to South Korea. Additionally, the biggest market for battery production scrap is, maybe unexpectedly, China.

We expect a lot to happen this year not least when it comes the launch of several new Chinese car brands in Europe and the development of battery production in both Europe and the US. The startup of several recycling processes in both regions will also help to verify how well they will meet the test to keep the materials in the original market.

The report and the data is available for our users of CES Online. If you want to know more, please read more here.

In our big project for this year we are working on complete database solution which will be open to customers and make it possible to perform analysis of the current and future end-of-life market down to cell level.

Until launch we will work with customers to produce customised data sets and to help interpret the implications of the findings.