2 trends right now with potential to significantly affect the future battery recycling landscape:

-Battery/cathode producers' integration of recycling in their upstream activities
-Battery producers' direct involvement in BaaS (Batteries-as-a-service) https://www.circularenergystorage-online.com/post/sk-innovation-and-kia-motors-join-forces-in-latest-of-several-korean-circular-battery-initiatives

While it may appear like these are two separate trends they are in fact tightly connected.

Recycled batteries can be an important feedstock for cathode producers but consolidation of curated volumes is a challenge.

BaaS enables retained ownership – and control – of batteries.

As batteries, with BaaS, are under the battery company's ownership they can over time be upgraded while old batteries are taken back for use in ESS – Something that otherwise is hard as batteries remain for years in cars which then often are exported.

They can then be recycled.

Chinese companies like BAIC and Nio have been the pioneers in BaaS with CATL as an enabling partner. Donfeng, Geely and SAIC are following suit.

This is now adopted by the South Korean players. Which currently have a much bigger direct impact on the market in EU and the US.

Same is true for vertically integrated recycling with GEM and Brunp as pioneers and Xiamen Tungsten, Huayou, Ganfeng and several others as followers.

In South Korea Ecopro and Posco lead the way working closely with SK, LG and Samsung as well as with recyclers such as Sungeel.

In Europe we see similar trends for vertically integrated recycling with Umicore as pioneer and Northvolt/Revolt, JM/Stena, BASF/Fortum/Eramet following.

However when it comes to BaaS we haven't seen much, except for Renault's leasing program and an upgrade program from BMW.

Which leads to the question: what do European recyclers do to secure their feedstock?

How do they obtain ownership of batteries that by current owners are regarded as usable and valuable assets?

2nd life could be the answer, enabling acquisition of batteries for a higher price through the value from future use. But besides that many battery makers/recyclers have been against 2nd life it doesn't help when the product in which the batteries sit, is even more valuable.

This is where export of vehicles comes in. Increasingly EVs that otherwise would have been scrapped today are instead exported to countries where the price of the wreck + repairs is still lower than the market value.

We estimate that this is the destiny for 30-40% of the EVs.

BaaS can solve this.

Interestingly the only top-selling EV in EU which isn't a used top-seller in Ukraine is Renault Zoe. Guess why.

That is on top of the fact that BaaS generates recurring revenues and continuous customer relationships (marketers say that's a good thing).

Which brings us back to the South Korean and Chinese players which not only are investing in BaaS as a part of tight vertically integrated operations which include recycling. They are also the ones that invest more than anyone else in the EU (and US) battery value chain.

Now, we might ask us which players the requirement of 4%-12% recycled content in batteries placed on the EU market will mostly benefit.

This requirement is already challenging to meet in 2030, especially for lithium and nickel. Access to feedstock will be key.

That foreign players are advantaged is not a problem for EU. Jobs will be delivered as well as a decarbonized/electrified vehicle fleet.

However, investors and OEMs should pay attention.

It's time to move beyond the mountain-of-waste/tsunami/"only 5% is recycled" analysis.