A Day Will Come When Lithium-Ion Battery Recycling Is Practical, But It Is Not This Day

Investment conclusions

I don’t agree with Creation Inn’s conclusion that second life battery applications will be a thing. Second life was a crucial talking point when metal prices were lower and lithium-ion battery manufacturers and users knew that the costs of dismantling used battery packs and recycling used cells would be higher than the value of the embodied metals.

Now that metal prices have climbed to levels where recycling is attractive, I can’t imagine anybody going to the trouble of spending $XXX to buy, test and refresh old cells, spending another $YYY to mate those used cells with new cooling systems, control electronics and housings, and then spending another $ZZZ to sell and install second life systems.

Over the last five years, dozens of companies have launched stationary battery systems for residential and commercial use. While the hype level has been high, the market’s response has been tepid if not cool. In fact, nobody is even close to a profitable business in the stationary energy storage sector.

Since I don’t believe second life will be a thing and I don’t believe recycling will be a business where technology wins, I don’t see a clear path for investors who want to position their portfolios for the inevitable growth in the sector. When it becomes possible to identify the players who will control the recycling feedstock supply chain, rational investing may be possible. Until then, I think the smartest thing to do is void recycling technology plays.

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Alpha Stockman 2 years ago Member's comment

Good stuff, when can we read more by you?

Michael Molman 2 years ago Contributor's comment

I have been following the technoligical metals space for a while and figured that one day lithium ion battery recycling could become an enormous industry. But as this article shows it will be a while before this space becomes practical #lithium

Charles Howard 2 years ago Member's comment

I still have a lot of faith in #lithium. Even more I would like to see more by John Petersen.

Bill Johnson 2 years ago Member's comment

Very insightful.