Electric Vehicles Battery Recycling Market to Reach USD 172.86 Billion by 2035 as Critical Mineral Recovery, Closed-Loop Supply Chains and EV Battery Retirement Volumes Accelerate

Exclusive Market Analysis | Battery Materials & Critical Minerals

The global electric vehicles battery recycling market reached US$ 1.61 billion in 2025 and is projected to reach approximately US$ 172.86 billion by 2035, growing at a 43.67% CAGR during 2026-2035, according to DataM Intelligence. The market is becoming a strategic answer to three connected pressures: critical material security, battery waste regulation and closed-loop manufacturing. As automakers and cell producers scale electric vehicle platforms, electric vehicles battery recycling is shifting from an environmental service into a supply-chain intelligence function that recovers lithium, nickel, cobalt, graphite, manganese, copper and aluminum for future battery production.

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2026 Official Developments in EV Battery Recycling Plants, Automaker Partnerships and Critical Material Recovery Programs

Official 2026 developments show that the EV battery recycling market is moving from pilot-stage circularity toward commercial processing, second-life storage and regional recovery infrastructure.

Fortum Battery Recycling signed a grant agreement with the European Climate, Infrastructure and Environment Executive Agency in March 2026 for the NEXT HYDROMET project, a planned expansion of its hydrometallurgical battery recycling facility in Harjavalta, Finland. The grant has a potential value of up to EUR 40 million and is designed to improve recovery of critical metals from end-of-life EV batteries and industrial battery waste.

Redwood Materials and Rivian announced an energy-storage partnership in 2026 to deploy a 10 MWh second-life EV battery storage system at Rivian's Normal, Illinois facility. The project shows how retired EV packs can be repurposed before final recycling, extending battery value and supporting domestic energy resilience.

Stena Recycling announced in April 2026 that it had invested more than SEK 500 million to expand EV battery reuse and recycling, strengthening its circular battery value-chain position in Europe.

ACE Green Recycling and Athena Technology Acquisition Corp. II announced a US$ 32 million PIPE investment in April 2026 to support ACE's proposed business combination, Texas facility development and international operations.

ACCUREC-Recycling reported in March 2026 that its lithium recovery facility at Krefeld had been officially commissioned in December 2025, describing it as a milestone for lithium recovery from used batteries.

Closed-Loop Supply Chain Becomes the Market's Strategic Center

EV battery recycling is the process of collecting, dismantling, processing and refining used electric vehicle batteries and battery-production scrap to recover valuable materials for reuse. In the new battery economy, recycling is not only about avoiding waste. It is about keeping critical materials inside regional supply chains and reducing exposure to volatile mining, refining and import risks.

DataM Intelligence identifies recovery of lithium, cobalt, nickel, graphite, manganese, aluminum and copper as central to the market. The same report segments the market by battery type, vehicle type, process, application and region, reflecting how recycling demand is now tied to chemistry selection, fleet growth, processing technology and battery manufacturing geography.

Growth Drivers: EV Batteries, Scrap, Regulation and Sustainability Targets

The strongest driver is the expanding global EV fleet. The International Energy Agency reported that electric car sales exceeded 20 million in 2025, equal to around one-quarter of new car sales, creating a long-term pipeline of future end-of-life batteries.

Battery manufacturing scrap is also becoming a near-term feedstock source. Gigafactories generate offcuts, rejected cells and production waste before large volumes of retired EV packs arrive. This makes recycling commercially relevant before the first mass EV retirement wave fully matures.

Regulation is another major catalyst. The EU battery rules set lithium recovery targets from waste batteries and future minimum recycled-content requirements for cobalt, lithium and nickel in EV and industrial batteries. These rules are turning black mass recycling and certified material recovery into compliance tools for automakers, recyclers and cathode-material suppliers.

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Detailed Segment Analysis
Hydrometallurgical Recycling: The High-Recovery Process Segment

DataM segments the market by process into hydrometallurgical, pyrometallurgical, mechanical and others. Hydrometallurgical recycling is gaining strategic attention because it can recover high-value battery metals through chemical processing after mechanical pre-treatment.

The segment matters because modern batteries contain multiple valuable materials that require selective recovery. Hydrometallurgy can support recovery of lithium, nickel, cobalt and manganese from black mass, making it commercially important for closed-loop battery supply chains. Fortum's NEXT HYDROMET expansion is a strong example of how recyclers are scaling this pathway around higher metal recovery, lower-temperature processing and regional critical-material security.

NMC Batteries: The Highest-Value Recovery Stream

DataM lists lithium nickel manganese cobalt batteries as a core battery-type segment. NMC batteries are attractive to recyclers because they contain nickel, cobalt, manganese and lithium, creating stronger recovery economics than lower-value chemistries.

This segment is especially important for long-range EVs and premium battery platforms. Recyclers with strong NMC processing capabilities can support automakers that need recycled nickel and cobalt for regulatory compliance, sustainability reporting and supply-risk reduction. NMC recycling is also relevant to battery-material procurement because recovered metals can reduce dependence on concentrated mining regions and strengthen traceability.

LFP Batteries: The Volume Challenge

Lithium iron phosphate, or LFP, is expanding because it offers lower cost, strong safety performance and no cobalt requirement. However, LFP batteries create a different recycling challenge because they contain fewer high-value metals than NMC batteries. DataM identifies LFP as one of the battery types shaping market demand.

The opportunity in LFP recycling is volume, process efficiency and lithium recovery. As LFP adoption grows in mass-market EVs, two-wheelers, commercial fleets and energy storage systems, recyclers will need lower-cost processes that can handle large feedstock volumes while still recovering lithium and other usable materials. ACE Green's stated focus on LFP recycling technology and lithium and graphite extraction reflects this shift toward chemistry-specific recycling models.

Market Disruption: Collection Logistics, Black Mass Trade and Chemistry Variability

The market faces four practical disruptions. First, collection logistics remain complex because EV packs are heavy, high-voltage and regulated for transport. Second, black mass trade is becoming more strategic as countries seek to retain recovered critical minerals rather than export intermediate material. Third, recovery economics depend on commodity prices, battery chemistry and process yield. Fourth, chemistry variability forces recyclers to design flexible systems for NMC, LFP, NCA, LMO and future battery formats.

Regional Outlook: USA, Japan, Germany and South Korea

The USA is strengthening domestic battery recycling through industrial policy. In March 2026, the U.S. Department of Energy announced up to US$ 500 million to expand critical mineral processing, derivative battery manufacturing and recycling, directly supporting domestic closed-loop battery supply chains.

Japan is approaching the market through supply-chain resilience and advanced energy-storage strategy. METI's 2026 Battery and Power Industry Strategy revision highlights supply-chain risks, domestic manufacturing progress and the need for advanced storage solutions.

Germany is relevant through EU battery regulation, automotive manufacturing and circular-material compliance, while South Korea is reinforcing its battery technology base through official 2026 investment plans, including KRW 235.1 billion for semiconductor, display and battery core source technologies.

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Competitive Landscape and Official Company Profiles

DataM Intelligence lists key players including GEM Co., Ltd., Eramet, Li-Cycle Corp, Fortum, Umicore, Redwood Materials Inc., Shenzhen Highpower Technology Co., Ltd., ACE Green Recycling, Inc., Stena Metall AB and ACCUREC-Recycling GmbH.

Fortum Battery Recycling is positioned around European battery circularity, collection, pre-treatment and hydrometallurgical refining. Its 2026 CINEA grant agreement matters competitively because it supports expansion of critical-metal recovery from end-of-life EV batteries and industrial battery waste.

Redwood Materials is building a domestic circular battery platform across recycling, critical materials and second-life energy storage. Its 2026 Rivian partnership shows how EV packs can move through a staged value chain: reuse first, then recycling and material recovery.

Stena Metall, through Stena Recycling, is strengthening battery reuse and recycling capacity with major investment in EV battery management. Its 2026 expansion supports industrial-scale circularity and positions the company around safe collection, reuse and recycling services.

ACE Green Recycling competes through proprietary battery recycling technology and modular recycling systems. Its 2026 PIPE financing supports Texas facility development and international operations, making it relevant to localized lithium battery recycling and battery-material recovery.

Outlook: Circular Supply Intelligence Defines the Next Growth Cycle

The next phase of the electric vehicles battery recycling market will be defined by circular supply intelligence. The winners will not only process waste; they will help automakers, cell makers and material suppliers track battery flows, recover strategic metals, meet recycled-content rules and reduce dependence on fragile raw-material supply chains.

For procurement, partnerships, R&D, sustainability and investment screening, the message is clear: EV battery recycling is becoming a core infrastructure layer for the closed-loop battery supply chain. As lithium battery recycling, black mass processing and second-life battery systems mature, recycling will move from an end-of-life obligation to a strategic source of battery-material security.

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Contact:
Fabian Mathew
DataM Intelligence 4market Research LLP
6th Floor, M2 Tech Hub, DataM Intelligence 4market Research LLP, Lalitha Nagar, Habsiguda, Secunderabad, Hyderabad, Telangana 500039
USA: +1 877-441-4866
Email: fabian@datamintelligence.com

About DataM Intelligence
DataM Intelligence is a global market research and business intelligence firm delivering actionable insights across healthcare, pharmaceuticals, chemicals, energy, technology, food, and industrial sectors. Through syndicated reports, custom research, consulting, and competitive intelligence services, the company helps organizations identify growth opportunities, navigate market challenges, and make informed strategic decisions in over 50+ countries worldwide.

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