Newsletter August ‘25
This postponement, part of an industrial simplification package, gives battery makers more time to prepare and allows the EU to set up guidance and verification bodies. Other provisions of the regulation took effect on schedule in August 2025, including a harmonized extended producer responsibility framework for battery producers.
US Boosts Domestic Supply Chain: In the United States, the Department of Energy announced nearly $1 billion in new funding to strengthen domestic battery material production. More than half (up to $500 million) will go toward expanding critical mineral processing, battery manufacturing, and recycling capacity in the U.S. This investment, aligned with a recent executive order on American energy supply, aims to reduce reliance on foreign sources of lithium, nickel, and other EV battery inputs.
Battery Passport & Traceability
Preparing for 2027 Battery Passports: With the EU’s digital battery passport mandate on the horizon (all EV and industrial batteries sold in Europe must carry a digital passport by February 2027), industry activity ramped up in August.
Traceability Pilots and Standards: Industry coalitions continued to pilot battery passport systems and traceability standards. The Global Battery Alliance (GBA) reported progress on large-scale pilots demonstrating how digital passports can embed end-to-end traceability and ESG data into batteries, enhancing buyer transparency on raw material origins and carbon footprints. Automakers are also increasingly demanding supply chain auditability – for example, ensuring cobalt and lithium are sourced ethically – to meet upcoming due diligence rules and qualify for EV incentives. This trend is pushing the entire value chain toward better data sharing and supply chain visibility ahead of formal passport rollouts.
Circularity & Innovation
Recycling Partnerships: Upstream and downstream players forged new partnerships to “close the loop” on battery materials. Nevada-based recycler Redwood Materials announced a strategic collaboration with heavy equipment maker Caterpillar to recycle lithium-ion batteries from Cat’s electric mining machines, recovering critical minerals like lithium and returning them to the battery supply chain. Caterpillar’s zero-emission underground loaders rely on large battery packs, and Redwood will help ensure those metals are efficiently reclaimed at end-of-life. This initiative, backed by Caterpillar’s investment in Redwood, underscores a push for a truly circular economy in the mining sector – where the metals extracted by mining equipment eventually get reused in new batteries instead of going to waste.
OEMs “Closing the Loop”: In Europe, Mercedes-Benz officially opened the region’s first integrated battery recycling facility at Kuppenheim, Germany. Using a novel mechanical-hydrometallurgical process (developed with Primobius GmbH), the plant can process 2,500 tons of spent batteries per year and recover over 96% of valuable metals. The reclaimed lithium, nickel, cobalt, and manganese will be used to produce an estimated 50,000 new battery modules annually for Mercedes EVs. Having been operational since spring 2024, the facility reached final commissioning of its hydrometallurgical circuit in August, marking a major step toward low-carbon, closed-loop supply chains in the auto industry. Automakers are also exploring second-life uses for batteries (such as grid storage) before recycling, further improving sustainability. These innovations in recycling and reuse not only cut waste and emissions but also reduce dependence on freshly mined materials – strengthening the overall resiliency and responsibility of the battery value chain.
Sources: Reuters (2025/08/14), ESG Today (2025/08/14), Council of the EU (2025/07/18), Tata Technologies via ET Manufacturing (2025/08/19), Redwood Materials (2025/08/18), SMM News (2025/08/12)
