Driving Circularity
Car manufacturers are not only demanding cleaner batteries from their suppliers, but also taking active roles in ensuring responsible sourcing, regulatory compliance, and end-of-life battery recycling. The result is a more transparent and circular battery lifecycle, from mine to showroom to recycling plant.
Decarbonization and Transparency in the EV Value Chain
Leading automakers such as Mercedes-Benz and BYD have made sustainability a strategic priority in their electric vehicle programs. Mercedes-Benz has committed to a carbon-neutral fleet (“Ambition 2039”) and is working closely with its battery suppliers to ensure materials like lithium and cobalt are ethically sourced. Chinese EV giant BYD, for its part, set ambitious climate targets in its 2024 ESG report – aiming to cut the carbon intensity of operations 50% by 2030 and achieve carbon neutrality across its entire value chain by 2045. BYD has even elevated ESG oversight to the board level and appointed a Chief Sustainability Officer, underlining the importance of sustainable growth to its mission. These downstream companies recognize that a truly sustainable EV requires scrutinizing every link in the supply chain.
Transparency is a key focus. Automakers are preparing to meet new battery passport requirements that will give customers detailed information about the battery in each vehicle. Starting in 2027 in Europe, every electric vehicle battery will come with a digital passport containing data on its provenance, composition, carbon footprint, and even the share of recycled content. This innovation, mandated by the EU Battery Regulation, is driving car companies to work closely with their suppliers on data sharing and verification. The payoff will be greater consumer confidence – an EV buyer could scan a code and see that the battery was made with low-carbon energy and materials from conflict-free, responsibly run mines. Companies like Umicore and others in the Global Battery Alliance have helped shape these transparency standards, and automakers are now poised to implement them, giving sustainability a visible, trackable presence in every vehicle sold.
Closing the Loop with Battery Recycling
Downstream players are also directly engaging in the circular economy by ensuring batteries are recycled at end-of-life. Automakers realize that reclaiming the valuable metals in used batteries not only reduces waste and environmental impact but also helps secure a supply of materials for future batteries. A shining example is Mercedes-Benz’s new recycling facility in Kuppenheim, Germany – the first of its kind by an automaker, using an integrated mechanical and hydrometallurgical process to recover lithium, nickel, cobalt, and more from spent batteries. Opened in late 2024, this plant (built in partnership with technology firm Primobius) allows Mercedes to close the loop on its batteries, producing high-purity, low-carbon battery materials that can go straight into making new cells. Mercedes-Benz is thus the world’s first automotive manufacturer to operate its own recycling plant of this nature, marking a milestone in circular manufacturing.
Automakers are also partnering with specialized recyclers to handle battery returns. In North America, BMW announced in 2024 a partnership with Redwood Materials to recycle lithium-ion batteries from BMW and MINI electric vehicles. Redwood works with BMW’s dealership network to collect old battery packs, then recycles and refines the materials so they can be used in new batteries. Remarkably, the critical minerals in lithium batteries can be recycled indefinitely – they aren’t consumed like fuel – meaning today’s EV batteries can become tomorrow’s raw materials. Redwood’s recycling process uses much less energy and cuts CO₂ emissions by about 70% compared to mining new metal, highlighting the environmental win-win of such collaborations.
Other downstream collaborations abound. Ford, GM, and other automakers have established take-back programs and teamed up with recyclers (like Li-Cycle and others) to handle battery scrap from manufacturing as well as end-of-life packs. Li-Cycle, for instance, has emerged as a preferred recycling partner for many North American and European manufacturers – in 2024 the company serviced about 13 different EV makers and 15 battery producers with its recycling facilities. By designing EV batteries with recycling in mind and ensuring a collection network exists, automakers are treating batteries not as hazardous waste but as valuable assets to recuperate. This approach not only mitigates environmental impacts and meets regulatory responsibilities (such as extended producer responsibility laws), but also provides a secondary stream of materials that reduces reliance on virgin mining.
Overall, downstream leaders are demonstrating that the life cycle of a battery doesn’t end when it leaves the factory or even when it’s removed from a car. Through transparency initiatives and robust recycling efforts, they are extending that life cycle in a continuous loop. This positive, proactive stance means consumers can look forward to EVs that are not only zero-emission on the road, but are built and retired in a way that respects the planet’s resources and communities.
Sources Consulted:
ESG Times (2025/04/02), Umicore News (2025/04/14), Primobius Press Release (2024/10/21), Redwood Materials Press Release (2024/09/19), Li-Cycle Investor News (2025/01/10)
