The Rise of Critical Material Recovery in Automotive Recycling

Automotive scrap is rapidly becoming a more attractive source of critical materials than many primary mineral sources. With over 100 million electric vehicles (EVs) expected to reach end-of-life over the next two decades, IDTechEx's "Critical Material Recovery 2025-2045: Technologies, Markets, Players" report predicts that the value of critical materials recovered annually by 2045 will surpass US$100B.

 

The automotive sector's reliance on critical materials for decarbonization will fundamentally change end-of-life vehicle recycling and metal value recovery. The recovery of valuable platinum, palladium, and rhodium used in catalytic converters for emission control has long supported the auto scrap recycling market. However, greater vehicle electrification presents critical metals and rare-earth elements (REEs) used in Li-ion batteries (LIBs) and electric motors as the emerging value opportunity.

 

 

 

Historically, much of the value from automotive recycling has been generated from the recovery of critical platinum group metals (PGMs) from internal combustion engine (ICE) vehicle catalytic converters. As much as 15 grams of platinum, palladium, and rhodium are commonly employed per vehicle for emission control. These critical platinum group metals are routinely recovered from end-of-life vehicles, primarily driven by their high intrinsic value - a typical ICE vehicle can contain $100s to $1000s worth of PGMs.

 

In electric vehicles, high-value critical material components reside within the battery and the electric motor. Tens of kilograms of critical metals, such as lithium, nickel, and cobalt, are used in cathode materials within Li-ion batteries. Moreover, rare-earth elements such as neodymium, praseodymium, and terbium compose up to 33% by weight of the NdFeB permanent magnets used in the electric motor.

 

 

IDTechEx estimates that up to US$1600 worth of critical Li-ion battery metals and rare-earth elements can be recovered per electric vehicle. Yet despite EVs bearing greater critical material value compared to conventional ICE vehicles, recovery is far from straightforward. A principle challenge limiting critical material recovery from end-of-life electric vehicles is increased dismantling complexity - separation and isolation of valuable components from auxiliary components, adhesives and casings - due to variability in Li-ion battery and electric motor designs on the market.

 

 

Pyro- and hydrometallurgical metal extraction technologies are commercially mature for primary mineral processing and will be key in emerging automotive critical material recovery markets.

 

Pyrometallurgical critical material extraction (e.g., smelting) is commercially mature for valuable metal recovery from automotive scrap. Despite high CapEx requirements, high energy consumption, and pollution generation, pyrometallurgical processes remain highly effective in concentrating and isolating critical materials in Li-ion batteries from low-value waste.

 

Hydrometallurgical extraction, where critical materials are chemically leached and separated in the liquid phase, remains the most applicable technology for end-of-life EV component recycling. In fact, hydrometallurgical processing is required to isolate critical materials, even after initial pyrometallurgical treatment. Hydrometallurgical extraction is chemically robust, offers high metal separation efficiency, with up to 98% reduced emissions compared to primary mineral processing.

 

In the shadow of more mature recovery processes, direct recovery and recycling technologies show increasing potential. For example, Li-ion battery cathode powders may be regenerated by lithiation, while rare-earth NdFeB magnet alloys may be directly recovered by hydrogen gas processing, promising an over 50% reduction in total energy costs. IDTechEx predicts that as lithium, nickel, cobalt, and rare-earth elements consolidate in electric vehicle applications over the next two decades, direct recovery technologies are poised for growth.

 

 

Circular critical material supply chains are beginning to emerge in anticipation of the tens of millions of end-of-life EVs expected to be produced annually by 2045. With critical lithium, nickel, cobalt, manganese, and rare-earth elements (REEs) consolidating in Li-ion battery and NdFeB magnet applications, end-of-life EVs represent a well-defined secondary source.

 

Circular REE supply chains are in their infancy, but key partnerships are forming. With over 90% of global annual REE processing occurring in China as of 2024, automotive OEMs, including Ford, BMW, and Bently, are building circular REE supply chains to mitigate supply challenges. Focusing on electric motor recycling, Ford has partnered with Ionic Technologies and Less Common Metals to establish a circular supply chain for high-specification NeFeB magnets containing 100% recycled REEs.

 

 

The established critical PGM recovery market, which regularly contributes over 20% of annual PGM supply, demonstrates the strength and resilience of circular supply chains. IDTechEx predicts that critical Li-ion battery metal and rare-earth element recovery from end-of-life EVs will be a strong growth market by 2045, driven by the emergence of circular automotive supply chains. The challenge in the short term will be weathering low end-of-life component supply while the majority of EVs remain in use - technology providers capable of accepting primary mineral sources in the meantime are best positioned to meet this challenge.

 

 

End-of-life automotives are poised to become a significant source of critical materials by 2045. The shift towards vehicle electrification is consolidating critical lithium, nickel, cobalt, manganese, and rare-earth elements in Li-ion batteries and electric motor components. Established pyro- and hydro-metallurgical extraction technologies are likely to dominate critical material recovery from these emerging sources. However, direct recycling techniques present the potential to disrupt this.

 

As this new market evolves, key challenges face the circular supply of critical Li-ion battery metals and rare-earth element materials within the automotive market. In the short term, end-of-life component supply must be managed to ensure economic viability - this looks likely to be achieved by supplementing processes with primary mineral sources. In the mid- to long-term, battery, and motor design variability will complicate dismantling and processing for critical material recovery. Key partnerships within a circular supply chain will be paramount in overcoming these challenges and are beginning to emerge.

 

IDTechEx predicts that the critical material recovery market will reach US$110B by 2045. The growth anticipated will be driven by the recovery of critical lithium-ion battery metals and rare-earth elements from end-of-life electric vehicles. Key critical material extraction and recovery technologies are evaluated, with full analysis on emerging secondary material source markets.

 

For more information on IDTechEx's research on this topic, please see the report "Critical Material Recovery 2025-2045: Technologies, Markets, Players". Downloadable sample pages are available for this report.

 

For the full portfolio of sustainability market research available from IDTechEx, please visit www.IDTechEx.com/Research/Sustainability.

IDTechEx provides trusted independent research on emerging technologies and their markets. Since 1999, we have been helping our clients to understand new technologies, their supply chains, market requirements, opportunities and forecasts. For more information, contact research@IDTechEx.com or visit www.IDTechEx.com.