The global EV battery recycling market is on track to reach $24.5 billion by 2035, expanding at a compound annual growth rate (CAGR) of 23.8% from its estimated 2025 value of $3.8 billion, according to a comprehensive market analysis released by Circular Energy Storage Research and Consulting. The projection reflects the convergence of rising end-of-life battery volumes, tightening regulatory mandates across major economies, and growing demand for recycled battery materials as feedstock for new cell production.
The report, published in November 2025, identifies the period between 2028 and 2032 as the critical inflection point, when the first large-scale wave of EV batteries sold during the 2018–2022 adoption surge begins reaching retirement age. By 2030, 1.5 million tonnes of lithium-ion batteries will reach end-of-life globally, rising to over 4.7 million tonnes by 2035. Processing this volume will require a more than tenfold increase in global recycling capacity from current levels.
Regional Market Breakdown
China is expected to dominate the market through the forecast period, accounting for 52% of global recycling revenue by 2035. The country’s lead reflects both its position as the world’s largest EV market and the head start its recyclers have in building commercial-scale capacity. GEM Co., Brunp Recycling, Huayou Cobalt, and Ganfeng Lithium collectively operate facilities with combined annual processing capacity exceeding 500,000 tonnes, with significant expansions underway.
Europe is projected to capture the second-largest market share at 24% by 2035, driven by the EU Battery Regulation’s recycled content mandates and collection targets. The report identifies Germany, France, and Sweden as the leading European markets for recycling investment, with major facilities under construction or in development by Cylib, Northvolt (Revolt Ett), Eramet, and BASF.
North America will reach $4.2 billion in market value by 2035, representing 17% of the global total. Redwood Materials, Li-Cycle, and Ascend Elements are the leading players, with Redwood’s Nevada facility alone targeting 100 GWh of annual processing capacity by 2030—enough to supply materials for 1.3 million EV battery packs per year.
“We are entering the decade where battery recycling transitions from a niche waste management activity to a strategic pillar of the battery supply chain. The companies and countries that build recycling capacity now will control a significant portion of the battery materials market in the 2030s.” — Hans Eric Melin, Founder, Circular Energy Storage Research and Consulting
Key Growth Drivers
The report identifies five primary factors driving market expansion:
- Regulatory mandates: The EU Battery Regulation, China’s 2026 recycling policy, and emerging frameworks in Japan, South Korea, and India are creating compliance-driven demand for recycling services
- Raw material economics: Recycled cathode materials can be produced at 20–40% lower cost than virgin equivalents for certain chemistries, depending on commodity prices and processing efficiency
- Supply chain security: Geopolitical tensions and resource nationalism are motivating automakers and cell manufacturers to secure domestic sources of battery-grade materials through recycling
- Manufacturing scrap: Battery cell production generates significant scrap volumes—estimated at 10–15% of input material—that represents a near-term, high-quality feedstock for recyclers
- Technology improvements: Advances in direct recycling, hydrometallurgical processing, and electrochemical recovery are improving yields and reducing costs, making recycling viable for lower-value chemistries like LFP
Investment Landscape and Outlook
Private and public investment in battery recycling has accelerated sharply. The report tracks over $12 billion in announced recycling investments globally between 2023 and 2025, with an additional $8–10 billion in projects at various stages of planning and permitting. Venture capital and private equity firms have become increasingly active, drawn by the sector’s combination of regulatory tailwinds, long-term demand visibility, and improving unit economics.
However, the market faces headwinds. Lithium and cobalt prices declined through much of 2024 and 2025, compressing recycler margins and prompting some companies to delay expansion plans. The proliferation of LFP batteries—which yield lower-value recovered materials—poses an ongoing economic challenge for recyclers whose business models were built around higher-value NMC chemistries.
The report concludes that the battery recycling industry is entering a critical scaling phase. Companies that successfully navigate the next five years—building capacity, securing feedstock agreements, and adapting to evolving chemistry mixes—will be positioned to capture a substantial share of what will become one of the fastest-growing segments of the global clean energy economy.
