Electric vehicle (EV) production is expanding and evolving at a considerable rate, resulting in an increased need to identify sustainable methods of recycling lithium-ion batteries. As EV batteries reach their end of life, a myriad of new lithium-ion technologies and recycling centers are emerging to meet this growing need, while promoting the circular economy of the EV movement.
As EV battery manufacturers partner with recyclers, it is crucial that battery components are returned to the product lifecycle.
There are essentially two key ways of recycling lithium-ion batteries – hydrometallurgical and direct recycling. During the hydrometallurgical process, valuable metals like lithium, nickel and cobalt are extracted. And while the direct recycling process is still being refined, its goal is to restore EV battery components without having to dismantle the battery.
“One of the most significant advancements in lithium-ion battery recycling is the shift from traditional pyrometallurgical methods toward more sustainable hydrometallurgical and direct recycling processes,” said Chris Rentsch, process development manager at Koch Modular Process Systems. “Hydrometallurgy allows for the recovery of high-purity critical materials like lithium, cobalt and nickel, using chemical separation and purification steps.”
David Regan, vice president of commercial at Aqua Metals, said that one of the most significant advancements in lithium-ion battery recycling is the development of innovative refining technologies that make domestic recycling more cost-effective and environmentally sustainable. Aqua Metals has pioneered a proprietary process called AquaRefining that enables the clean and efficient recovery of battery-grade lithium, nickel, cobalt and manganese from black mass.
According to Jennifer Ott, deputy director, Nevada Tech Hub, lithium battery recycling is advancing rapidly, and several Nevada companies are leading the way. Redwood Materials recently launched Redwood Energy, demonstrating how reused EV batteries can power a clean microgrid, proving that circular economy solutions are already in motion. Aqua Metals has developed a proprietary “aqua-refining” process to refine black mass from recycled batteries back into battery-grade minerals, using minimal chemicals, offering a cleaner path to reuse.
American Battery Technology Company has developed a universal lithium-ion battery recycling system that separates and recovers each individual elemental metal, including lithium, cobalt, nickel and manganese from end-of-life batteries. The company has invested in R&D with the University of Nevada, Reno to find new ways to recover critical minerals with higher yields and lower environmental impact.
“Innovators like these companies demonstrate that Nevada is at the forefront of building a sustainable, circular lithium economy,” Ott said. “One of the biggest challenges in lithium-ion battery recycling is scaling up capacity to match the rapidly growing volume of EV batteries reaching end-of-life. Redwood Materials is addressing this by building infrastructure that can process large quantities of used batteries and integrating them into clean energy systems, such as the microgrids previously mentioned.”
Another key challenge is recovering high-purity materials efficiently and sustainably. As Ott explained, Aqua Metals addresses this with its proprietary, water-based refining technology. Their ability to extract battery-grade metals from black mass is a major step forward, but widespread adoption of these technologies requires investment, regulatory support, and streamlined logistics.
“Ultimately, building a circular battery economy is more than innovative technology, it also means creating the environment for success, including investments and workforce development – something the Nevada Tech Hub consortium is actively working toward,” Ott said.
Nevada Tech Hub, led by the College of Business at the University of Nevada, Reno, is a consortium of governmental, industry, educational, and nonprofit organizations all aligned toward a common goal: to leverage Nevada’s rich natural resources and develop a full spectrum lithium economy within the state. The Nevada Tech Hub is one of 31 Tech Hub designees nationally. The program invests in regional partnerships to grow critical industries, strengthen national security, and create high quality jobs. Nevada Tech Hub is focused on building a complete “Lithium Loop” – a closed-loop lithium economy that includes extraction, processing, battery manufacturing, and recycling.
Rentsch added that one major challenge is the variability in battery chemistries and formats across different EV manufacturers. This inconsistency complicates the design of standardized recycling processes.
“Another obstacle is logistics and disassembly, as batteries are often difficult and costly to collect, transport and break down safely. Crushing or shredding a lithium-ion battery can cause the electrolyte solution to ignite, starting a fire inside the process equipment,” Rentsch said. “Therefore, the packs are typically shredded under a continuous water spray to prevent fires, but the unburned organic electrolytes then contaminate the water.” Koch Modular has engineered and constructed distillation equipment to safely remove and recover the electrolyte from the quench water.
From an engineering perspective, Rentsch said the separation and purification of recovered materials remain technically complex.
“Extracting lithium and other high-value metals at high purity levels requires precise, multi-step chemical processes where specialized process development and modular design capabilities can add significant value,” Rentsch said.
Regan added that the biggest challenge currently facing EV battery recycling is the cost of acquiring black mass, the shredded material from spent batteries that serves as feedstock for refining.
“Due to subsidized and artificially inflated pricing from Chinese and Korean buyers, domestic recyclers are struggling to secure black mass at sustainable margins,” Regan said. “This pricing pressure makes it extremely difficult for U.S.-based refiners to compete, even with advanced technology. Without federal intervention or policy support, the economics of recycling EV batteries domestically remain constrained – despite the growing availability of spent batteries.”
Expanding Opportunities
With the global push for electrification and on-shoring of the supply chain, Ott believes the lithium-ion battery recycling industry will continue to see rapid innovation and expansion.
“In the years ahead, I would expect to see major advancements in efficiency, scalability, and more integration between recyclers and manufacturers,” Ott said.
Another area of expansion within the lithium-ion battery recycling segment of industry is in workforce training. As these companies scale up, Ott indicated that they will require a pool of skilled workers to fill positions. Nevada Tech Hub is working to fill this need by collaborating with industry partners and higher education to develop the training and degree programs needed to upskill existing employees and train new hires. For example, one program through Western Nevada College being developed now specifically addresses the need for employees in the lithium battery recycling sector.
“Domestic battery recycling is a core component of national energy and security strategies, with support from both public and private sectors,” Ott said. “Continued research, automation and policy alignment will accelerate progress, which is something we’re already seeing within the Nevada Tech Hub consortium.”
While several companies – including Aqua Metals – are building pilot and commercial-scale facilities, Regan said EV battery recycling in the United States is still in its early stages.
“Market conditions have limited growth, especially over the past year. A sharp drop in lithium, cobalt and nickel prices – combined with the high cost of black mass – has discouraged investment in new recycling capacity,” Regan said. “As a result, much of the black mass generated in the U.S. is still being exported to Asia, where it’s processed under less stringent environmental standards. Until there is greater pricing stability and policy support, the build-out of domestic infrastructure will remain slower than the pace of EV adoption requires.”
That being said, Rentsch said the modularization of recycling plants is transforming how quickly and efficiently these facilities can be deployed. Modular systems enable faster commissioning, reduced risks, and scalability – critical advantages for an industry trying to keep pace with EV battery demand and upcoming regulatory pressure.
The United States is in the early stages of scaling EV battery recycling infrastructure. A number of pilot and commercial-scale plants have come online or are under development, led by companies like Redwood Materials, Cirba Solutions, ABTC, Li-Cycle, and Ascend Elements. The Department of Energy has also committed funding toward building a domestic recycling supply chain to support EV battery production.
“Koch Modular sees strong market signals and investment activity, and we anticipate continued growth in modular recycling facilities – particularly those that can be built faster and more flexibly using horizontal modular construction, reducing the time to commercial readiness,” said Rentsch, who stressed that the process technology to recycle end-of-life batteries must continue to evolve as new cathode materials, silicon-enhanced anodes, and sodium-ion batteries enter commercial service.
“Newer solid electrolyte batteries may require additional solvent dissolution steps after shredding,” Rentsch said. “Koch Modular anticipates a rise in demand for modular process systems tailored to this market – systems that can recover metals at battery-grade purity, reduce waste, and support closed-loop manufacturing. Ultimately, recycling will be a key pillar in reducing the environmental impact of EVs and ensuring the security of critical materials.”
Regan said that as global lithium prices rise and demand for critical minerals increases, economic conditions will become more favorable for domestic lithium-ion recycling. He said this shift will unlock the investment needed to scale up U.S.-based infrastructure and processing capacity.
“We believe the industry will evolve toward a regionally integrated, circular supply chain, in which the materials from spent batteries are recycled, refined and returned to manufacturers within North America,” Regan said. “With the right market signals and federal support, lithium-ion battery recycling can become a foundational component of America’s clean energy economy.”
Published September 2025