Lithium-ion battery recycling is important for a green transition as it helps to conserve resources and reduce the environmental impact of battery production. With the increasing demand for electric vehicles and renewable energy storage, there is a growing need for lithium-ion batteries. However, the supply of lithium and other materials used in these batteries is limited, and mining these materials can have negative environmental consequences. By recycling used batteries, it is possible to recover valuable materials such as lithium and cobalt, reducing the need for mining and conserving resources.

In recent years, there has been a significant upswing in companies offering such recycling services. For example, Redwood Materials, cofounded by a previous CTO at Tesla, founded in 2017, currently provides materials for batteries for about 60,000 new electric vehicles per year, and aims to “produce enough anode and cathode for one million electric vehicles annually” by 2025. Importantly, the company is not yet profitable, which presumably also applies to many of its competitors.

There are a variety of already existing forecasts on the trajectory of this market. According Fortune Business Insights report, the market size is projected to be at around $6.55 billion by 2028, while other estimates put the total lithium-ion battery recycling market cap at $22.8 billion by 2030 or even $38.21 billion by 2030 according to Allied Market Research.

Anticipating the size of this market is important to estimate the future impact that recycling can have on the decarbonisation of the world economy, as lithium-ion batteries are considered a key component in this transition and a thriving recycling business may mean reduced strain on supply.