As vehicle electrification forges ahead, auto dismantlers and recyclers of auto parts are taking on a new charge: figuring out how to monetize used electric vehicle (EV) batteries that are just starting to come their way. Most of today’s lithium-ion EV batteries likely have years of life left but some get damaged or have warranty issues, and plenty more will flow into the system in coming years.
Redwood Materials, North America’s largest EV battery recycler, saw an opportunity in this unfolding landscape and launched a software platform to provide recyclers and dismantlers an easy pathway to get the batteries into Redwood’s process—with benefits.
Platform users access a database, a product catalogue of sorts. They enter part numbers, vehicle make and model to find the battery packs in their inventory and get a quote. Redwood pays for what to the company is a premium commodity and manages the logistics to get the battery packs back to Redwood’s plant near Reno, Nevada, where processors recover metals to go into new batteries.
“Trying to understand dismantlers’ problems was new, so we started working just with California businesses [where domestic EV adoption is moving quickest] to understand their pain points. We went in and listened to learn how to give them a valuation tool and quickly get batteries out of their yards, back into the value chain,” says Dustin Krause, senior director of Business Development and Automotive Partnerships, Redwood Materials.
What dismantlers say they care most about is moving the battery packs out fast, safely, and compliantly.
Transportation of end-of-life EV battery packs is no small consideration.
They store a lot of energy so proper packaging in preparation for the trip is critical to avoid fire risk. Redwood advises dismantlers on ensuring they are packing and shipping to Department of Transportation (DOT) requirements, looking out for damaged battery packs, ensuring terminals are not touching, and mitigating other risks for thermal runaway.
The software tool is newly available across the U.S. and is slated to expand to Canada, Mexico, and Europe soon.
“To scale a business to the size that we aspire to, we have to create systems to make it easier for [dismantlers] to interact with us,” Krause says.
The company, which has long worked with dismantlers around the country, is banking on the portal to draw more of them and enable it to expand on what it’s been doing: the old-fashioned way of calling on accounts by picking up the phone and sending out emails.
Having a simple software tool streamlines the process and makes it more automatic than the old way. Redwood believes it will be pivotal to recovering more materials.
“We want to make sure batteries end up in the right place, processed appropriately, and get used again for their inherent value at scale,” Krause says.
The online portal is in a budding stage. Launched in October 2023, it’s helped recover a relatively small supply.
“It’s early. But the whole point of this was to be the first and create a tool to get feedback from dismantlers and support them. Until now there hasn’t been a playbook on how to handle EV batteries or hybrid batteries,” Krause says.
Dealing with EVs has been an eye-opening experience for Washington State-based Spalding Auto Parts.
“EVs have changed the landscape of auto recycling. They are here and are anticipated to become a larger component of the auto world. We are adapting and learning as we go,” says Jim Deaton, general manager, Spalding Auto Parts.
He and his team find that given lithium-ion batteries’ high voltage, amps, size, and shape, their proper handling is paramount and not easy.
“We have learned that new technology needs to be embraced and handled correctly. We are constantly reviewing our safety and handling of lithium-ion batteries. Redwood has been a great company for us to pair up with … [The company] is a key component in this process and has offered insight into processing, storage, and shipping,” Deaton says.
The shift to electrification is driving other new efforts, including to localize battery production in the U.S. Ford, General Motors, and other auto makers are looking to bring battery production on shore.
There’s plenty of room for growth, and both OEMs and recyclers are bracing for a spurt in production and, with that, the need for more recycling capacity.
“I think we will see winners in the U.S, but we will also see production in Canada and other parts of North America. We are already seeing more battery facilities going into what we call the Battery Belt—North Carolina, Georgia, Kentucky, Tennessee…” Krause says.
Eyes are on California where about 16% of the cars sold in 2022 were EVs, but the number should accelerate fast. California plans to require all new vehicles sold in the state to be electric or plug-in electric hybrids by 2035.
Players investing in an electrified country sound confident they will gain a new competency around building high-tech batteries rather than importing them. Lithium-ion battery recyclers are in the wings as EV adoption and localized battery production ramp up.
“At Redwood we will recycle the material that comes out of those production facilities and return it to the manufacturers to put back in battery production. We want to be at the front of the line in getting back lithium-ion batteries of all kinds from all types of business,” Krause says.
“Auto dismantlers will be a big one because they will be the end of the line for EVs and hybrids.”