Business · 2026-10-19 · Afternoon briefing

EV battery recyclers falter amid a global supply crunch

Global recycling capacity for electric-vehicle batteries is vastly underutilised, creating a crisis for firms outside of China. In 2025, the world had capacity to recycle 4.2 million metric tons of lithium-ion batteries, but only 670,000 tons were actually discarded, according to data from Mobility Global. This overcapacity, projected to be four times the available supply, is expected to persist through 2030.

The lack of feedstock has pushed several companies to the brink. US startup Ascend Elements filed for bankruptcy protection in April, while Canadian recycler Li-Cycle did so in 2025. German chemical giant BASF has suspended plans for new facilities in Spain and Canada. The turmoil benefits China, which already controls roughly 80% of both global battery production and recycling capacity.

The problem is compounded by a market shift towards cheaper LFP batteries, which are less profitable to recycle and now comprise over 55% of all EV batteries. Supply chains are also fragmented; Japan's Sumitomo Metal Mining must import crushed battery scrap from Europe and the US to feed its new plant, as around 80% of Japan's own used EVs are exported.

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EV battery recyclers falter amid a global supply crunch

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