Panasonic and Redwood Materials Partner to Revolutionize EV Battery Recycling

In a bid to reshape the electric vehicle (EV) industry’s approach to sustainability, Panasonic Holdings has announced a groundbreaking partnership with U.S.-based startup Redwood Materials. The joint venture aims to pioneer the recycling of critical minerals from used EV batteries, ultimately creating a closed-loop system where reclaimed materials can match the cost and performance of newly mined resources.

Panasonic Energy, a subsidiary of Panasonic Holdings, will collaborate with Redwood Materials to extract high-purity nickel from end-of-life batteries by the year 2028. This move is poised to address the growing demand for essential materials in the EV sector while simultaneously reducing the carbon footprint associated with mining and production.

Shoichiro Watanabe, Chief Technology Officer of Panasonic Energy, expressed enthusiasm for the project, stating, “We can secure resources that are in danger of depletion and reduce the amount of carbon dioxide emitted from the resource extraction stage to production.”

The initiative primarily focuses on nickel, which constitutes approximately 90% of the cathode material in Panasonic’s EV batteries. Nevertheless, the companies also plan to explore the recycling of cobalt and lithium, other critical components of these batteries.

The recycling project will be headquartered at a Redwood Materials factory in Nevada, where they currently collect materials from defective batteries and scraps generated at a Panasonic Energy plant in the state. The partnership’s next phase will involve developing technology to extract high-purity nickel from used batteries and supply it to Panasonic Energy.

Watanabe noted that used batteries contain a concentrated source of resources compared to ore, requiring less energy to process. Depending on the fluctuating resource prices, recycled batteries could potentially offer a more cost-effective alternative. The ultimate goal is to recycle batteries at an “ambitious scale” while ensuring equivalent cost and performance to batteries produced from newly mined materials.

Panasonic Energy aims to achieve the milestone of producing batteries using recycled and newly mined materials at the same cost by 2028.

The collaboration between Panasonic and Redwood Materials exemplifies a growing trend in the EV battery industry, where manufacturers are increasingly partnering with recycling companies to harness the potential of recycling critical minerals. Earlier this year, Chinese recycling company GEM forged a partnership with Mercedes-Benz’s Chinese subsidiary and battery giant Contemporary Amperex Technology Co. Ltd. (CATL) to recycle batteries.

Noboru Sato, a visiting professor at Nagoya University, emphasized the competitive advantage of making recycled critical minerals 30% cheaper than newly mined ones, stating that it would be a significant step towards dominating the EV battery market.

The push for sustainability in the EV industry is not limited to individual companies. The European Union is set to implement a “battery passport” system by 2026, mandating the recording of information about a battery’s material sources, recycling rates, and CO2 emissions during production. Similar measures are also being considered in the US and India.

Japan is committed to establishing a domestic battery recycling system by 2030, actively supporting the development of recycling technologies and batteries designed for ease of recyclability.

The move toward recycling also carries geopolitical significance, as China, a leader in the EV industry, currently controls a substantial portion of the world’s critical minerals and rare-earth elements.

According to Fortune Business Insights, the global lithium-ion battery recycling market, encompassing EV batteries, is expected to experience exponential growth, surging from $3.22 billion in 2022 to an estimated $14.89 billion by 2030.

Japanese trading conglomerate Marubeni is actively investing $50 million in a U.S.-based recycling company to facilitate the recycling of cathode materials from used EV batteries, further highlighting the potential for substantial business opportunities in the rapidly evolving recycling ecosystem.

The partnership between Panasonic and Redwood Materials marks a significant step forward in the sustainable transformation of the EV industry, promising a future where recycled materials play a pivotal role in powering the vehicles of tomorrow.

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