Editorial Article

Battery Recycling: The $78 Billion Market of 2033

Updated September 11, 2026

Battery Recycling: The $78 Billion Market Waiting for Its Batteries

Every lithium-ion battery ever built becomes, eventually, a feedstock question. The first wave of electric vehicles sold at scale is still on the road, most of it inside warranty, and the packs inside those cars will not retire in volume for another decade and a half. That timing gap is the defining feature of the battery recycling market — a business with double-digit growth, mandated demand from regulators, and, for now, not nearly enough of the material it exists to process.

Pheonix Research sizes the global battery recycling market at USD 21.69 billion in 2025, reaching USD 78.83 billion by 2033 at a 17.51% CAGR — a 3.63x expansion, or +263.4% in eight years. Recycling volumes are the shadow of an EV battery market that Pheonix expects to grow from USD 91.70 billion to USD 369.50 billion over the same window at 19.03% a year.

But recycling is the one link in the battery chain whose growth is gated by time rather than capital. Its feedstock is a fixed stock: the batteries already sold. Everything else — policy, chemistry, capacity — plays out against that constraint.

Why recycling became critical-minerals policy

For a decade, battery recycling was framed as an environmental story. That framing is out of date. Recycling is now a supply-security instrument, and the reason is concentration.

The International Energy Agency’s Global Critical Minerals Outlook 2025 is blunt about where the industry sits: two-thirds of global battery recycling capacity growth since 2020 has been in China. Refining concentration is the mirror image — China produces over 75% of refined cobalt by geography and ownership, and the IEA projects the average share of the top three refined-material suppliers will still be around 82% in 2035, barely better than 2020.

Against that backdrop, recovered material stops being a sustainability metric and becomes a diversification lever. A tonne of lithium, nickel or cobalt recovered from a used pack is a tonne that does not have to be imported, permitted, mined or shipped through a chokepoint. The global cobalt mining market and global lithium mining market forecasts both assume supply that has to come from somewhere; recycling is the fraction of it that can come from a warehouse in Ohio or a plant in Poland.

The feedstock problem: growth before the supply arrives

Here is the fact that explains almost every headline in this sector. The IEA has found that most battery recycling input today comes from manufacturing scrap, not end-of-life batteries, and that scrap will account for roughly two-thirds of available feedstock through 2030.

That is a function of battery lifespan. A 2025 study by the Royal Society of Chemistry puts typical EV pack life at 12 to 15 years, which means the packs sold in the EV boom of 2020–2024 become a dominant waste stream only after 2040. Companies that built large-scale plants in 2021–2023 ahead of that curve have been running on manufacturing scrap and consumer-electronics batteries — smaller streams, less consistent chemistry, and hotly contested.

You can see the arithmetic in China, where the manufacturing base itself supplies the scrap. CATL’s annual report states that its recycling subsidiary Brunp recovered 210,000 tonnes of spent batteries and materials in 2025, up more than 60% year on year — while data it cites puts retired lithium batteries in China at 819,000 tonnes in 2025 (+9%). China’s production of ternary and lithium-iron-phosphate cathode materials reached 4.565 million tonnes in 2025, up 51%. The scrap is where the cells are made.

How a battery actually gets recycled

Three routes matter, and they are not interchangeable.

Pyrometallurgy smelts whole or shredded cells at high temperature. It is robust and chemistry-agnostic — it will take a mixed feed without complaint — but it burns energy, and lithium and graphite typically end up in slag rather than in a saleable product. Its economic value has historically sat in nickel, cobalt and copper.

Hydrometallurgy leaches shredded cell material — “black mass” — in acid or solvent to dissolve the metals, then recovers them in sequence. It reaches far higher lithium recovery, which is why almost every new plant announced this decade is hydromet. Its costs are complexity, reagent handling and wastewater.

Direct recycling aims to recover the cathode active material intact rather than dissolving it back to its constituent metals. It promises lower cost and lower carbon intensity, and it is the technology most exposed to the practical problem that a feedstock of mixed, unknown chemistries is exactly what it cannot handle well. It remains a minority route.

Before any of that comes pre-treatment: discharging, dismantling, shredding and separating a pack into black mass and recoverable fractions. Black mass is now a traded commodity in its own right — and a strategically sensitive one. China’s customs administration has moved to standardise imports of recycled lithium-ion black mass, clarifying that conforming material is not classified as solid waste and can be imported, subject to classification and packaging rules. Trade policy has arrived in the middle of the recycling value chain.

The regulatory engine: what EU law now requires

The single most powerful demand signal in this market is not a price or a technology — it is Regulation (EU) 2023/1542, the EU Battery Regulation. It converts recycling from an optional sustainability initiative into a compliance obligation, with dates that fall squarely inside Pheonix’s forecast window.

Obligation	Applies from	Level
Recycled-content disclosure	18 Aug 2028	Documentation of the share of cobalt, lithium, nickel and lead recovered, per battery model per year per plant
Minimum recycled content	18 Aug 2031	16% cobalt, 85% lead, 6% lithium, 6% nickel
Higher recycled content	18 Aug 2036	26% cobalt, 85% lead, 12% lithium, 15% nickel
Recycling efficiency — lithium-based batteries	End 2025	65% (higher target from end 2030)
Material recovery — lithium	End 2027 / end 2031	50% / 80%
Material recovery — cobalt, copper, lead, nickel	End 2027 / end 2031	90% / 95%

The practical effect is that recycled cobalt, lithium and nickel acquire a captive, regulated customer base from 2031. A cell maker selling into Europe will need documented recovered material in its active materials whether or not it is cheaper than primary metal. That is a demand floor written into law — and the reason the Western recycling build-out happened at all.

The market numbers

Pheonix’s forecasts place recycling inside a battery cluster compounding at a strikingly consistent 15–19%.

Market	2025 (USD bn)	2033 (USD bn)	CAGR
EV battery	91.70	369.50	19.03%
Battery recycling	21.69	78.83	17.51%
Battery manufacturing equipment	19.41	68.25	17.02%
Battery electrolyte production	11.49	41.08	17.27%
Stationary energy storage (ESS)	64.54	247.68	18.31%
EV charging infrastructure	40.22	147.28	17.61%
Lithium mining	1.40	5.62	18.97%
Cobalt mining	18.36	67.37	17.65%

One ratio is worth holding onto: recycling is equivalent to roughly 23.7% of the value of the EV battery market in 2025, easing to about 21.3% by 2033. That is a ratio of two market forecasts, not a cost breakdown — but the direction tells you something real. As volumes of retired cells scale, the value recovered per pack is under pressure from the same oversupply that has squeezed every other layer of the battery chain.

China’s grip, and the Western shakeout

The competitive picture has bifurcated sharply, and 2025–2026 was the year the gap became visible.

In China, recyclers are integrated with the cell makers that generate their scrap. CATL’s Brunp has a captive feedstock from the world’s largest battery producer and a captive customer for the recovered material. That closed loop is the structural advantage Western recyclers have spent years trying to replicate without owning a gigafactory.

In the West, the reckoning arrived fast. Li-Cycle, once the most visible name in North American recycling, filed for creditor protection in Canada and the US in May 2025, having been unable to draw down a USD 475 million US Department of Energy loan, and completed the sale of its Spokes, its Rochester Hub project and its intellectual property to Glencore in August 2025 by way of credit bid. Ascend Elements, which had raised over USD 1 billion, filed Chapter 11 in April 2026 after two DOE grants tied to its Kentucky cathode plant were cancelled. The pattern in both cases was the same: capital committed to process a feedstock that had not yet retired.

The most instructive counter-example is Redwood Materials, founded by a former Tesla CTO. Redwood has pivoted from shredding to producing battery-grade material: its Nevada campus receives over 20 GWh of batteries a year, reclaims over 95% of critical minerals, and runs what it describes as the first commercial-scale nickel “mine” to open in the United States in a decade. It raised more than USD 1 billion in equity in 2023, added USD 350 million in late 2025 with Nvidia’s investment arm participating, and holds a USD 2 billion conditional DOE loan. The strategy is deliberately the opposite of Li-Cycle’s: don’t sell shredding, sell cathode active material.

Second life, before the shredder

One more variable delays the feedstock. A retired EV pack that still holds 70–80% of its capacity has a second commercial life in stationary storage, where energy density matters far less than cost per cycle. Every pack diverted into second-life service is a pack that does not reach a recycler for another five to ten years.

Redwood again illustrates the strategy: it aims to deploy 20 GWh of second-life storage capacity by 2028, which would make it one of North America’s largest storage providers even as it scales recycling. For the recyclers, second life is both a revenue stream and a competitor for their own feedstock.

What to watch to 2033

The feedstock inflection. End-of-life EV packs do not dominate the waste stream until the 2030s. Watch the mix of scrap versus retired packs in recycler disclosures — it is the single best read on when the real market begins.
Compliance behaviour from 2031. Whether cell makers meet the EU’s recycled-content thresholds through genuine recycling or through paper-sourced recovered material is the difference between a recycling boom and a certificates market.
Black-mass trade policy. China’s import standardisation, and any Western export controls, will determine where refining capacity sits.
Direct recycling’s first commercial plant. If cathode-to-cathode recovery works at scale, it undercuts hydromet on cost and carbon.
Glencore buying Li-Cycle’s assets, and cell makers building recycling in-house, point to consolidation into larger materials groups rather than a standalone recycling industry.

Sources and further reading

Pheonix Research market intelligence:

Primary and industry sources:

Regulation (EU) 2023/1542 on batteries and waste batteries, Official Journal of the European Union, 28 July 2023 (Article 8 recycled content; recycling efficiency and material recovery targets).
International Energy Agency, Global Critical Minerals Outlook 2025.
CATL annual report and sustainability disclosure, 2026 (Brunp recycling volumes; China retired-battery and cathode-output data).
Reuters, “Battery recycler Li-Cycle files for bankruptcy protection in Canada,” 14 May 2025.
Li-Cycle Holdings Corp., “Li-Cycle Completes Sale of Certain of its Subsidiaries and Assets to Glencore,” 7 August 2025.
Resource Recycling, “Battery recycler Ascend Elements files for bankruptcy,” 13 April 2026.
Redwood Materials, Tahoe Campus and corporate disclosures, 2025.
Royal Society of Chemistry study on EV battery lifespan, 2025 (as reported by industry press).

Frequently Asked Questions

How big is the battery recycling market?

Pheonix Research values the global battery recycling market at USD 21.69 billion in 2025 and forecasts USD 78.83 billion by 2033, a CAGR of 17.51% over the 2026–2033 forecast period.

Why is battery recycling growing if there aren't enough used batteries yet?

Because growth is measured off a small base and driven by two supply streams. Manufacturing scrap — not retired packs — supplies most recycling input today and will be about two-thirds of feedstock through 2030, per the IEA. End-of-life EV packs become a dominant waste stream only after 2040, given typical pack lives of 12–15 years.

What does the EU Battery Regulation require?

From 18 August 2031, EV, industrial and SLI batteries sold in the EU must contain minimum recycled shares of 16% cobalt, 6% lithium and 6% nickel (and 85% lead). Those rise from 18 August 2036 to 26% cobalt, 12% lithium and 15% nickel. Separately, the regulation sets recovery targets — 50% of lithium by end-2027 rising to 80% by end-2031, and 90% of cobalt, copper, lead and nickel by end-2027 rising to 95% by end-2031 — and a 65% recycling efficiency for lithium-based batteries.

Which companies lead battery recycling?

CATL's Brunp subsidiary is the largest integrated player, recovering 210,000 tonnes of spent batteries and materials in 2025. In the West, Redwood Materials is the largest North American recycler and has moved into cathode active material production, while Li-Cycle's assets were acquired by Glencore after its 2025 insolvency and Ascend Elements filed for bankruptcy in April 2026.