Panasonic Holdings plans to recycle minerals from used EV batteries to make new ones, aiming to create a system where cells with reclaimed materials have equivalent cost and performance.
Subsidiary Panasonic Energy will work with U.S.-based startup Redwood Materials to extract high-purity nickel from used batteries by 2028.
“We can secure resources that are in danger of depletion and reduce the amount of carbon dioxide emitted from the resource extraction stage to production,” said Panasonic Energy Chief Technology Officer Shoichiro Watanabe.
While focusing on nickel, which accounts for approximately 90% of the cathode material in Panasonic’s electric vehicle batteries, the company will also consider cobalt and lithium recycling.
The project will take place at a Redwood factory in the U.S. state of Nevada. Redwood currently collects materials from defective batteries and scraps produced at a Panasonic Energy plant in the state and supplies the materials to other companies.
Moving forward, both companies will work on technology to recover high-purity nickel from used batteries and supply it to Panasonic Energy.
“Used batteries contain a higher concentration of resources compared to ore and require less energy to smelt. Depending on resource prices, recycled batteries can be cheaper,” Watanabe said, adding that the company wants to recycle batteries at an “ambitious scale.”
Panasonic Energy hopes to be able to make batteries using recycled materials and newly mined materials at the same cost as early as 2028.
Reusing resources by partnering with recycling companies is a growing trend in the EV battery industry. In February, Chinese recycling company GEM announced that it had partnered with Mercedes-Benz’s Chinese subsidiary and world EV battery leader Contemporary Amperex Technology Co. Ltd. (CATL) to recycle batteries.
“Battery manufacturers and recycling companies around the world are racing to develop technology to cheaply extract critical minerals from used batteries,” said Noboru Sato, a visiting professor at Nagoya University. He said that if a company could make recycled critical minerals 30% cheaper than new minerals, “it would be a big step toward winning in the EV battery market.”
The European Union plans to require companies to implement a “battery passport” system in 2026, which would record information about where a battery’s materials came from, how much of it is recycled and how much CO2 was emitted in production. The U.S. and India are considering similar measures.
Japan aims to establish a domestic battery recycling system by 2030 by supporting the development of recycling technologies and easily recyclable batteries.
The shift toward recycling has geopolitical aspects. China, which is bolstering its EV industry, controls much of the world’s supply of critical minerals and rare-earth elements.
The global lithium-ion battery recycling market, including EV batteries, will more than quadruple from USD 3.22 billion in 2022 to USD 14.89 billion by 2030, according to Fortune Business Insights.
Japanese trading house Marubeni is investing USD 50 million in a U.S. recycling company to recycle cathode materials from used EV batteries.
“There is a need to establish a supply chain that involves recycling from the standpoint of both reducing environmental impact and ensuring economic security, leading to significant business opportunities,” the company said.