Li-ion battery recycling: booming market with a reverse logistics challenge Premium

The increasing demand for Li-ion batteries has also brought to the fore the need for an organised battery recycling industry. Expected to be a $30 billion market globally by 2030, li-ion recycling industry is still in its nascent stages in India and has gaps to be fixed.

The increasing adoption of electric vehicles, the rising number of smartphones, laptops, and other consumer electronics, and the growing need for eco-friendly energy storage solutions have been driving the Lithium-ion (Li-ion) battery market in India. Estimated at $2.5 billion in 2023, it is expected to cross $5 billion in the next five years. 

The increasing demand for Li-ion batteries has also brought to the fore the need for an organised battery recycling industry in place. Expected to be a $30 billion market globally by 2030, Li-ion recycling industry is still in its nascent stages in India and has gaps to be fixed. The absence of a strong reverse supply chain which ensures the collection and safe transportation of end-of-life batteries to the recycler continues to be a challenge. 

Unorganised reverse logistics

Pankaj Sharma, co-founder of Bengaluru-headquartered EV battery technology company Log9, points out that in the case of lead acid batteries used in motor vehicles, a pricing mechanism that encourages the recycling of such batteries already exists. According to him, the Li-ion battery industry could also benefit immensely from a similar system.

“When a lead acid battery, which is the 12-volt starter battery in our vehicles, goes down the customer takes it to the battery seller. The seller would typically give him ₹300-400 discount on the new battery as an exchange price,” Mr. Sharma says. 

“There is a pricing mechanism and a supply chain where the seller is interested in buying the old battery, offsets some money for a new battery, and then sends the old battery back to the manufacturer. In Li-ion battery the reverse logistics is a little tricky because a similar back-end supply chain incentivisation must be created first,” he adds.

Identifying touch points