A July 21, 2023 post in Reuters alerted us to a clause in the U.S. Inflation Reduction Act (IRA), of which we were previously unaware. This clause states that all materials from spent EV batteries in United States are deemed ‘made in the country’, for purposes of recycling subsidies and production incentives. This gap puts them ahead of the pack, and promotes efforts to undermine China’s dominance according to Reuters.
Reusing Spent EV Batteries Opens a New Supply Channel
The clause in the legislation encourages recyclers to tap into a resource Reuters describes as ‘gold’. The news channel interviewed ‘more than a dozen industry officials and experts’. And they confirmed this new opportunity is enabling a fresh generation of local battery makers. This could represent a significant shift away from China handling virtually all EV battery recycling.
This market could soon begin to grow exponentially, as electric vehicles age, and their spent EV batteries accumulate at a faster rate. Now those batteries contain lithium, cobalt and nickel, all worth $1,000 and more per EV on the open market. And what’s more, those metals could soon be in short supply unless battery makers tap into fresh reserves.
IRA Treats All Recycled Battery Minerals as ‘Locally Sourced’
Qualifying U.S. battery recycling startups are also receiving generous contributions towards the cost of infrastructure. This should bring a previously almost-unaffordable business activity within reach, as recycling spent EV batteries becomes economically viable.
And so, in a nutshell if you like, scarce minerals in batteries anywhere in the US are deemed ‘locally sourced’, whether they are harvested from the earth, or recycled no matter where they came from originally. Some U.S. officials expect up to 40% of minerals in new batteries could be obtained locally in this way by 2040, significantly increasing strategic independence.
More Information
Mild Hybrid Vehicles the Pros and Cons
Safe Loose Battery Storage Tips for You