Home Commodities Cheaper electric car batteries pose waste risk, warns supplier

Cheaper electric car batteries pose waste risk, warns supplier

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Some of the world’s biggest carmakers risk creating a waste problem for the future by using cheaper electric car batteries made in China, according to Europe’s largest battery materials company Umicore.

Tesla, Volkswagen and Ford have all said they will use lithium batteries that contain abundant iron rather than more valuable metals such as nickel and cobalt in some of their electric cars in order to make them less expensive.

But Marc Grynberg, chief executive of Umicore, warned that they would have to pay more to have the batteries recycled once they reached the end of their lives. The cost may be borne by manufacturers if vehicles are within warranty.

“The recycling will come at a different cost which is not being factored into the equation so far,” said Grynberg. “The lower the metal value, the higher the net cost you have to incur to get the material recycled.”

The transition to electric cars is expected to create a large amount of waste batteries over the next two decades. Electric vehicle batteries will last an average of about 15 years, according to consultancy Circular Energy Storage, after which they can be reused in other applications or recycled.

Most lithium-ion batteries in electric cars contain nickel and cobalt, as well as lithium — metals that are expensive to extract.

But the use of alternative lithium-iron phosphate batteries, which contain no cobalt or nickel, has surged in China in recent years, as carmakers look to reduce the cost of electric vehicles to make them competitive with petrol rivals.

While they are less powerful, they can reduce the costs of manufacturing the battery by about 20 per cent, according to McKinsey.

Last week Tesla’s chief executive Elon Musk said on Twitter that “iron cathode cells are now competitive for stationary [energy storage] packs & mid range cars”.

Because iron is cheap and abundant there is little profit to be made from recycling it, reducing the incentives.

Grynberg said the value of recovered iron was low, while he had “no clue” whether the phosphates would be recycled. “The value of the materials included in an LFP battery are very low,” he said.

Umicore is Europe’s largest battery recycling company and also produces materials for battery makers such as South Korea’s LG Chem. Last week it pledged to be carbon neutral by 2035 for its direct Scope 1 and Scope 2 emissions.

The Brussels-based company is working with BMW and Swedish battery start-up Northvolt on using more recycled metals in car batteries.

Umicore is also involved in a pilot of a “battery passport” that will provide data on a battery’s full carbon footprint using blockchain, the technology behind bitcoin. “The European Commission has embraced the concept,” said Grynberg.

Just under half of China’s battery production capacity is for lithium-iron phosphate batteries, led by CATL, the world’s largest battery maker, according to Benchmark Mineral Intelligence.

Grynberg said the production costs of lithium-iron phosphate batteries were “vastly understated” due to excess capacity in China.

“There is ample spare capacity [in China] and the products are being sold at marginal cost or below cost,” he said. “Just to fill idle capacity. The full cost picture of using LFP [lithium-iron phosphate] is not being taken into account by anyone outside of China today.”

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