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A sustainable LiB ecosystem requires shifting from “waste management” to “design-for-reuse,” with batteries built for recyclability, second-life use, and smarter lifecycle management
Image Source: Getty
Over the decades, industries and governments worldwide made a remarkable shift from deflecting responsibility for climate action to taking the lead in developing and competing for the best clean technologies. At the heart of this transition is the mobility sector, where Electric Vehicles (EVs) are rapidly replacing internal combustion engines (ICEs), not only as a key strategy for achieving net-zero emissions by 2050 but also for enhancing energy security, reducing urban pollution, and fostering sustainable economic growth. Global EV sales rose by nearly 25 percent in FY 2024, compared to FY 2023’s 14 million. This surge places the spotlight on the key component powering these vehicles: the battery.
An EV’s performance largely depends on battery efficiency, which, in turn, relies on its chemistry. While there are various battery chemistries to choose from, lithium-ion batteries (LiBs) have emerged as the most dominant choice due to their superior energy storage, faster charging times, lower self-discharge rate and longer life span- capable of up to 1000 charge cycles. Additionally, their high electrochemical potential (up to 3.7V) and lightweight nature make them the go-to choice, balancing performance and cost.
The table below provides a quick comparison of key factors, explaining why LiBs dominate modern EV technology.
| Characteristics | Lead-Acid Battery | Nickel-Metal Hydride Battery | Lithium-Ion Battery |
| Energy Density (Wh/kg) | 30-50 (Short range) | 60-120 (Moderate range) | 110-160 (Long range) |
| Charge Time | 8-16 hours | 3-10 hours | 2-5 hours |
| Self- Discharge Rate | Moderate (4% to 6% per month) | High (30% per month) | Very Low (1%-3% per month) |
| Lifecycle (Charge Cycles) | 200-300 cycles | 300-500 cycles | 500-1000 cycles |
| Weight Impact | Very heavy, impractical for EVs | Heavy, reduces efficiency of EVs | Lightweight, improves efficiency of EVs |
| Usage in Modern EVs | Rarely used, mainly auxiliary | Declining, mainly in hybrids | Dominates modern EVs |
| Recyclability | Highly recyclable but inefficient | Limited recyclability | Partially recyclable, costly |
Table 1: Source: Author’s own creation based on US Department of Energy, Science Direct, Tycorun, Wiley Online Library, Battery Universe, Lohum, Battery University
The global push for EVs has driven up demand for energy transition minerals (ETMs), with LiBs at the centre. However, their sustainability is a double-edged sword. While LiBs help cut carbon emissions, their supply chain depends on large-scale mining of lithium, cobalt, and nickel, carrying environmental and social costs.
As India’s demand for critical minerals surges, ensuring battery circularity will be crucial for securing a stable supply of key materials like lithium, nickel, and graphite. A strong recycling ecosystem will not only reduce import reliance but also strengthen supply chains through domestic exploration and technological advancements, supporting a sustainable EV transition. However, despite existing circular economy models focusing on material recovery and reuse, inefficiencies remain.
The LiB circular economy follows a cascading path—EV use, second-life applications, and then recycling. While promising in theory, it falls short in practice. Currently, only 3 percent of LiBs are recycled, with lithium recovery rates sitting below 1 percent. Traditional recycling methods such as pyrometallurgy and hydrometallurgy remain energy-intensive and degrade valuable materials while complex battery designs make disassembly costly. This limits second-life applications. Additionally, as new battery prices decline, recycling and repurposing become less economically viable, reducing incentives for manufacturers (see: Table 2).
Figure 1: Life Cycle of an Electric Vehicle Battery,
Source: Drax
| Method | Description | Challenges |
| Pyrometallurgy | High-temperature processing to extract metals | Emits pollutants, fails to recover lithium and aluminum, causing material loss |
| Hydrometallurgy | Chemical based metal extraction (claims nearly 100% lithium recovery) | Relies on hazardous chemicals (acid, cyanide), high equipment costs, and complex processing |
| Battery Design | LiBs come with different chemistries (NMC, NCA, LFP) and non-standardized designs | Difficult disassembly, high labor cost, and incompatible recycling methods |
| Second-Life Applications | Repurposing EV batteries for energy storage (<80% capacity) | Complex state-of-health (SoH) assessment, inconsistent degradation and high safety risks |
Table: 2, Source: Author’s own creation based on online sources
As of December 2023, China led global battery recycling, surpassing 500,000 metric tons while the U.S. and Europe trailed at 200,000 metric tons each. India’s capacity is expected to rise from 61,000 tons in 2024 to 543,000 tons by 2030. However, true circularity remains elusive due to fragmented policies, economic constraints, and infrastructure limitations.
Figure 2: Global Battery Recycling Capacity,
Source: Author’s own creation
China enforces strict LIB recycling mandates under its 2018 Interim Measures and Traceability Provisions to ensure end-to-end tracking of battery usage and recycling effectiveness. The EU’s 2023 Battery Regulation mandates digital battery passports (DPP), minimum recycled content, and SOH tracking. In contrast, the US lacks federal mandates and instead relies on tax incentives under the Inflation Reduction Act (IRA) to promote domestic recycling. Yet, despite regulatory efforts, enforcement remains inconsistent, particularly in emerging markets.
India’s 2022 Battery Waste Management Rules (BWMR) introduced Extended Producer Responsibility (EPR) to formalise battery circularity by setting clear guidelines for refurbishment, repurposing, and recycling. The policy categorises battery waste based on application and mandates specific collection targets. While a step in the right direction, weak enforcement and accountability gaps limit its effectiveness. The lack of standardised material labelling and a centralised battery data system restricts lifecycle tracking and hinders recyclers from identifying recoverable components. Additionally, India lacks an efficient reverse logistics system as large-scale collection networks and automated sorting remain underdeveloped, further reducing recycling inefficiency. The EPR framework also suffers from financial ambiguities, risking inadequate payments to recyclers and enabling informal, unregulated practices to persist. Unlike the US and EU, where manufacturers compensate recyclers for handling lithium iron phosphate (LFP) batteries, India’s low EPR floor price threatens sustainability efforts and the economic viability of recycling. To strengthen battery circularity, the government must enforce stricter penalties for non-compliance, increase the EPR floor price to ensure fair compensation for recyclers, improve monitoring to curb informal recycling and establish a centralised battery data management system with standardised material labelling for efficient tracking and recovery.
Without high recovery yields, manufacturers find recycling economically unappealing. While the EU promotes battery repurposing, most global policies still prioritise recycling over reuse, leading to premature disposal of batteries that could otherwise serve second-life applications.
LiB recycling can very easily become costlier than mining raw materials. As newer EV batteries reduce reliance on cobalt, financial incentives for battery recovery shrink further. Recycling remains economically viable only if recovered materials match the performance of virgin materials and if technological advancements lower processing costs. Without high recovery yields, manufacturers find recycling economically unappealing. While the EU promotes battery repurposing, most global policies still prioritise recycling over reuse, leading to premature disposal of batteries that could otherwise serve second-life applications.
To achieve large-scale circularity, a mix of models can be explored such as Battery-as-a-Service (BaaS), closed-loop recycling, and urban mining to enhance material recovery, lower costs, and extend battery life cycles. Without coordinated investment in take-back systems, advanced recycling technologies and policy incentives for second-life applications, large-scale circularity remains unattainable.
Creating a truly circular economy requires a design-first approach that prioritises recyclability, reusability, and material efficiency from the outset. Current LiBs are optimised for performance over sustainability, making material recovery inefficient and costly. To close the loop, manufacturers must adopt modular, standardised and easily disassemblable battery designs to enable second-life use and efficient recycling. Emerging alternatives like solid-state and sodium-ion batteries eliminate the need for cobalt and nickel, reducing environmental impact and fire hazards. However, high costs and uncertain recyclability continue to hinder their commercialisation.
The composition of LiBs plays a critical role in their circularity. High-nickel NMC batteries offer greater energy density but are difficult to recycle. Despite their environmental risks, they retain economic value due to high cobalt and nickel recovery rates. In contrast, LFP batteries are safer and more durable but lack the same economic recycling incentives, making their end-of-life management less financially viable. Solid-state and sodium-based batteries provide safer, more sustainable alternatives by replacing liquid electrolytes with solid ones. However, without efficient recovery processes, they may face the same economic challenges as LFP batteries.
Repurposing batteries requires accurate degradation assessment, yet diverse battery designs make evaluation cumbersome. AI-powered BMS can analyse degradation patterns to optimise second-life applications. However, restricted access to battery data limits independent evaluation. Standardised battery designs across Original Equipment Manufacturers (OEMs) would simplify assessments. This would enhance circularity and reduce integration challenges in energy storage systems (ESSs). Scaling second-life solutions will require a hybrid approach that combines AI-driven diagnostics, standardised repurposing frameworks, and greater transparency.
Conventional recycling methods degrade valuable materials and remain costly. Direct recycling (cathode-to-cathode) retains cathode materials without breaking them down. It offers a more sustainable and cost-effective alternative though scalability remains a challenge for it. Similarly, hydrometallurgical processes including Deep Eutectic Solvents (DESs), offer greener lithium extraction using organic acids but face high costs, chemical instability and scalability issues. Until these methods mature, improving current recycling techniques is key to sustainability and reducing raw material dependence.
A sustainable LiB ecosystem goes beyond recycling, it demands a paradoxical shift from a “waste management” mindset to “design-for-reuse”. Batteries must be built for recyclability and second-life use, integrating smart designs and better lifecycle management. However, policy fragmentation and infrastructure limitations hinder progress. Closing these gaps requires global standardisation, stricter enforcement, and investment in second-life applications. Without coordinated actions, LiBs may shift from being a clean energy solution to a looming supply chain crisis.
Manini is a Research Assistant at the Centre for Economy and Growth, ORF New Delhi.
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Manini is a Research Assistant at the Centre for Economy and Growth, ORF New Delhi. Her research focuses on the intersection of geopolitics with international ...
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