Manufacturing and Recycling Electric Vehicle Batteries: The Environmental Impact

The recent passing of the Inflation Reduction Act was touted as a significant step forward for reducing fossil fuel use and pushing the US to switch to electric vehicle (EV) technology. 

Sadly, the devil is in the details, and the details of this bill are not very good. The tax credit in the bill will be the current $7,500 credit extended to 2032, and an additional $4,000 added to that credit for a total of $11,500. The problem is that according to the Alliance of Automotive Innovation, around 70% of the electric hydrogen and hybrid vehicles currently being sold in the US would not be eligible for the credit because the bill states: to qualify for the credit, final assembly must take place in North America, and will hinge on the vehicle’s size, total cost, and potential buyers’ income.  

Before 2024, 40 percent or more of the critical minerals and half of the battery components must come from the US or a free trade partner to access the total credit. However, these vital materials are sourced globally. Most cobaltcomes from the Democratic Republic of the Congo, and lithium is sourced from South America and Australia, with the processing of these materials taking place in China.

Assuming the California fossil fuel ban from 2030 happens, and other states follow suit, we must ask, are EVs more environmentally friendly to produce, and what will happen to all of these batteries once their time is up? The front end has an environmental impact from lithium mining, cobalt, and other essential metals like nickel. 

Let’s look at the contents of an electric vehicle battery, where they end up when their life is over, and ask if they are the best environmental choice. 

Can We Recycle Electric Vehicle Batteries?

Fortunately, EV batteries are highly recyclable. Cleantech company Li-cycle can extract and use over 95% of a lithium-ion battery’s components via a method called hydrometallurgy. Hydrometallurgy involves grinding the battery components up and running them through an acid solution.  

From there, several solvents and a series of electroplating rounds can pull the individual elements out of the solution. A simpler method of smelting is available, but requires more energy, and its results are less than impressive.

The resulting pollution caused by either method of battery recycling is negligible. However, the current problem is that there are insufficient recycling facilities operating at the required scale to process the increasing number of electric car batteries that are already coming to their end of life. 

As of 2022, a study from the Journal of the Indian Institute of Science found that in the US and EU, we are recycling less than 1% of the lithium-Ion we consume, which is down from a 2019 study that found global recycling of lithium-Ion batteries at about 5%. For comparison, we recycle about 99% of our lead-acid batteries used in vehicles and the power grid. 

The value of lithium, cobalt, and nickel is growing, and this study from the Clausthal University of Technology shows that recycling is economically viable. They state that process routes for cobalt, copper, and nickel achieve high yields, but lithium processing is more difficult and results in a lower yield albeit at a higher economic value.

Lithium Mining’s Environmental Impact

Lithium is a vital component of our modern batteries and plays an important role in battery chemistry, but it comprises only about 11% of a battery’s total mass. Most of the world’s lithium supply comes from Australia, Chile, and China, with the current global production of 500,000 metric tons of lithium carbonate equivalent (LCE) in 2021

McKinsey has estimated that this will grow with a sharp trajectory to between three and four million by 2030. In 2015, automotive needs ate up approximately 31% of the lithium supply, and this is expected to be the main user of the global supply going forward.

Data courtesy of Danwatch

Lithium is extracted in two ways: from salt flats and hard rock mining. When the hard spodumene ore (a translucent, grayish-white aluminosilicate mineral and essential source of lithium) is mined, it is broken apart, separated, and acid washed, with the lithium sulfate eventually separated out from the rest of the mix. 

The hard rock process is economically cheap compared to salt flat processing, but the product is low grade. This standard mining method comes with the customary environmental risks of pollutants forming in tailing ponds. And because hard rock mining is labor intensive, this method produces about triple the emissions per ton of lithium than that shown with salt flats. 

The world’s largest lithium producer, Australia, has about 46% of the global lithium production and relies heavily on the hard rock mining method.  

Salt flats are formed when water is pumped underground, and on its return to the surface, brings with it dissolved minerals. The brine is spread across several pools to evaporate, and left behind are minerals to be separated and processed. 

Salt flat mining is common in the triangle that overlaps Argentina, Bolivia, and Chile. The nearby Andes Mountain range has created large subsurface lithium deposits due to geothermal activity, which leaches minerals from volcanic rock. Dry higher elevations promote faster evaporation of the brine pools. 

The primary cost of salt flat extraction is its water use, and obtaining exact numbers is difficult. However, estimates for water use range from 250 gallons per extracted pound up to 240,000 gallons.  The Chilean government has provided data suggesting that the water for brine production at the Atacama flats exceeds the aquifer’s ability to resupply by 30%, and its lithium mining uses about 65% of the region’s water. 

These mining operations are taking place in a high desert where the water supply is limited; indigenous communities are in a water crisis predicament, and local agriculture is being strained. Bolivian indigenous groups living near abandoned mines also have to deal with the materials left behind, disrupting local ecosystems

Many of these indigenous groups have been subjected to similar abuses by international mining firms in the past. The result is that the communities now are in staunch opposition to new mining projects or have claimed significant ownership of the projects. 

The Other Materials Used in Batteries

Batteries contain several other materials, such as cobalt, nickel, and graphite. Half of the world’s supply of cobalt is mined out of Congo. There has been heavy Chinese investment into the Congo, resulting in many industrial mining operations that feed Chinese battery production demands.

However, local workers are often excluded from such enterprises and relegated to digging unsafe artisanal mineswith minimal, if any, recourse in the case of injuries. These locals end up selling their cobalt to the same traders who work with the industrial-scale mines, and it is eventually ferried to China.

Production of nickel is not as tenuous but is not without cost. Nickel is mined throughout the globe, and around 30% of the total supply comes from Indonesia. Most nickel is used in stainless steel, but 6% is used to make batteries.  

Are Electric Vehicles Good for the Environment?

When taken collectively, it may appear that there is a high cost to making electric vehicles a reality. When assessing the lifecycle impacts of electronic versus traditional fossil fuel burning vehicles, EVs are undoubtedly front-loaded with emissions due to the environmental cost of making batteries. Yet, the difference is made up over the vehicle’s lifetime. 

It’s estimated that in the US internal combustion engines produce between 60 to 68% more emissions than EVs. Considering the outsized role that fuel makes in this calculation, creating a grid using more clean energy is almost as important as putting more EVs on the road. In Europe, depending on how the EV is charged, average emissions savings range between 28% and 72%.  

Closing Thoughts

At the end of the day, a transition to electric vehicles is still necessary to make a real change to global emissions. Nonetheless, those living near mining operations still have a significant number of environmental, water, and health challenges to contend with, even before they are confronted with the challenges of climate change. 

Governments should be doing a better job holding the mining industry to higher standards of proper site management. We must also build out the electric infrastructure that includes multiple sources of green energy and its effective distribution. 

On the other end of the EV lifecycle, we need to make the recycling of lithium batteries easier and preferable to lead acid batteries. It is up to us to push democratic governments towards a greener future and hold them to account for the hazardous flaws in the current infrastructure. 

Disclaimer: The information provided in this article is solely the author’s opinion and not investment advice – it is provided for educational purposes only. By using this, you agree that the information does not constitute any investment or financial instructions. Do conduct your own research and reach out to financial advisors before making any investment decisions.

The author of this text, Jean Chalopin, is a global business leader with a background encompassing banking, biotech, and entertainment. Mr. Chalopin is Chairman of Deltec International Group,

The co-author of this text, Robin Trehan, has a bachelor’s degree in economics, a master’s in international business and finance, and an MBA in electronic business. Mr. Trehan is a Senior VP at Deltec International Group,

The views, thoughts, and opinions expressed in this text are solely the views of the authors, and do not necessarily reflect those of Deltec International Group, its subsidiaries, and/or its employees.