The electric vehicle market is one of the largest emerging markets to date, providing a prime opportunity for investors to cash in by investing in battery recycling stocks.
Currently, lithium ion batteries are among the most common of rechargeable batteries used. These batteries contain heavy metals that may be harmful to the environment if they are disposed of improperly.
To address this problem, battery recycling has become one of the most discussed topics within the electric vehicle industry.
There are plenty of companies stepping up to do their part to make the environment better by recycling lithium ion batteries, and turning a nice profit in doing so.
In this post, I'll explore what battery recycling is, some of the best battery recycling stocks, and much more. Let's get started!
- Li-Cycle Holdings
- Umicore Group
- American Battery Technology Company
What are Battery Recycling Stocks?
Battery recycling stocks are publicly traded companies that focus on the process of recycling batteries.
This can be a company that is designed to properly dispose of lithium ion batteries in a safe manner to ensure that the environment is protected.
Because lithium ion batteries contain heavy metals they can be harmful to the environment if they are disposed of improperly.
If you own a lithium ion battery, it's important that you dispose of it by way of recycling.
Battery Recycling Stats
Every year, more than 460,000 tons of lithium ion batteries will reach the end of their life.
Nearly 2 million tons end of life batteries were accounted for in 2020 and with electric vehicles expected to ramp up in production, so will the numbers.
This makes battery recycling companies an important part of the electric vehicle industry.
Best Battery Recycling Stocks
Like any other stock, investing in battery recycling company stocks come with a risk.
Whether they are traded on the New York stock exchange or elsewhere, a smart investing decision will be better than making a critical mistake that can cost you.
The first on the list is the Canadian-based Li-Cycle Holdings.
Currently, it's market cap is estimated at $1.3 billion. The company is the largest recycler of lithium ion batteries in North America – making it a solid investment in the lithium ion battery sector.
In 2021, it has went public with the help of a SPAC merger that took place in August of that year.
Li-Cycle currently collects and recycles lithium ion batteries from 85 sources. Once recycled, the are resold as battery metals including nickel, manganese, cobalt, graphite, and lithium carbonate.
The company received an investment of $100 million through Koch Strategic Platforms and has a partnership with LG Chem and LG Energy, some of the top battery manufacturers in the world. Both companies plan on investing $50 million upon the condition that they meet their commercial milestones.
As part of their Hub and Spoke business model, Li-Cycle has battery recycling facilities that are located next to battery manufacturers (known as spokes). Meanwhile, hubs are facilities that will take broken batteries and create metals that can be used in new batteries.
Li-Cycle will sell these metals to the manufacturers themselves. They also plan to have up to 100,000 tons of capacity at their Spokes and double that in their hubs by 2025. Currently, they have hubs in Kingston, Ontario (Canada) and Rochester, New York (United States).
They have plans for constructing even more hubs in the United States and in parts of Europe. One of the hubs will be constructed in Norway, which is the leading country for electric vehicles on the European Market. More than three-quarters of the market share consist of EVs.
Once completed, the hub in Norway will be powered completely by clean energy. The same may be expected for the other facilities in Europe and the United States. While the future is looking bright for the company, it may be important to pay attention to the financials.
In their latest financial results, they generated nearly $8.7 million in sales. This signals that the company may not be as profitable as one may assume. Yet, they have over $500 million cash on hand, which can give some investors confidence in the company's future going forward.
Umicore Group (UMICY) is based on Belgium and focuses on recycling and diversifying materials. Over half of their profits come from recycling, but also have plenty of presence in terms of emission control for cars and battery materials.
While they do recycle lithium ion batteries, they refine and recycle other precious and industrial metals. Their 2021 revenues are one third of their market cap of 9 billion Euros. Even better, this stock will pay you a dividend just for holding on to the stock.
Even though dividends are a good thing, it may be a good idea to look at the bigger picture. That is considering the long-term growth of the stock and eventual increase of its value.
American Battery Technology Company
Next, we have the American Battery Technology Company (ABML).
This is a small-cap stock with no known reports for revenue. However, this may be a good time to get in on it before it's able to grow more in value.
This Nevada company not only extracts lithium, but also recycles it. The current CEO and CTO is a former engineer for Tesla – which is likely a good sign for the company. Because of the environmental risks involved, the company uses technology that will prevents high-temperature processing.
As of now, the company is building a recycling plant for non-thermal batteries. Upon completion, it is expected that 20,000 tons will be processed each year with revenue being generated in mid to late 2022.
ACCUREC Recycling GmbH
ACCUREC Recycling GmbH is one of the oldest battery recycling companies having been founded in 1996. It's based in Germany and has long recycled NiCad batteries. However, they constructed a facility in 2015 that was designed for lithium battery recycling.
Many EV batteries that will reach the end of their life may end up here. Especially if they are electric vehicles throughout continental Europe. The company is transparent when it comes to their process and is very efficient with their recycling.
Thus, this may be an option for the activist investor that holds a high premium on integrity in the company they invest in. The good news is that this company is a certified battery recycler, making it more reputable than other battery recycling companies.
Battery Solutions is one of the other large-scale EV recycling companies based in North America.
Like ACCUREC, they have been around for decades and shown themselves to have a high level of trust in what they do.
While they are focusing on economic prosperity, they are also looking to extend the quality of life of battery materials as well. Most of the materials they handle will be sent to battery manufacturers so that the materials are placed in new battery packs.
They continue to pursue their mission in creating a better environment and the same may be said for other companies aimed at recycling the same batteries and materials.
Redwood Materials is based in Carson City, Nevada. It's one of the more well-known companies in the battery recycling market.
The company was founded in 2017 by J.B. Straubel, who was Tesla's Chief Technical Officer at one point.
They recycle lithium-ion batteries and also produces battery materials designed for other purposes like electro-mobility. They are currently following trends in the electric vehicle industry and still research and create solutions in the recycling process or electric vehicle batteries.
As of right now, Ford is the only major company in the automotive industry that has partnered with Redwood Materials for recycling EV batteries. Other companies may follow at some point in the future making it a good time to jump on this stock while it still has tremendous growth potential.
Based in the United Kingdom, G&P Service prides itself as one of the best waste battery specialists in the country.
It's origins date back to the 1960s when they had been in the business of consumer electronics. It's also one of the most cost-effective and reliable recycling companies for spent batteries.
They handle battery chemistry like nickel-metal hydride, silver oxide, nickel-cadmium, and lithium-ion among others. They are also experts on the recycling processes involved including transport, handling, and storage. For their part, they may be one of the many companies that clients and investors alike can trust.
If you are looking to get into the foreign stock markets, G&P Service should not be overlooked. Especially when they have been in the business for a long period of time.
The next company is Retriev Technologies.
This North American battery technology company serves clients in both the United States and Canada. It provides plenty of solutions for batteries that are classified as consumer, industrial, or electric.
They have the technology to recycle various batteries including lithium ion batteries and other such as Lead Acid, NiCad & NiMH, and regular lithium batteries (among other materials). They have been known for having a reputation for being a diverse battery recycling company for a long time.
They have been in business for well over 25 years and show no signs of slowing down any time soon.
It may be wise to jump on the wagon and check out their stock while you can. Especially if you are looking to trade companies that are based in North America.
SNAM is a French recycling company that is considered one of the top names in the EV battery recycling market.
They have long been doing their part in reducing the environmental impacts involving battery recycling. They strive to do all the heavy lifting so EV operators don't have to.
They have treated lithium ion waste since 2000. They also follow ISO 14001 standards and has established an environmental management system in the process.
If you are looking for a company that is trustworthy and knows exactly what they are doing in terms of recycling lithium ion batteries, SNAM is worth a look.
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Frequently Asked Questions
What company will recycle batteries from Tesla?
Currently, Redwood Materials is believed to be the recycling facility for Tesla batteries. They also are partnered with companies such as Amazon and Panasonic for their disposal services. In fact, Panasonic is the company that creates batteries for Tesla.
Are there any publicly traded battery recycling companies?
Yes. There are several companies that are publicly traded. One of them is Li-Cycle. They can be found on the New York Stock Exchange, making it a stock that is high profile and worth a look.
How much of the EV batteries are recycled?
The percentage amount of a battery may vary. According to Tesla, none of their lithium ion batteries that are scrapped end up in landfills. That's because they are all 100 percent recycled every time.
Who are the largest lithium battery recyclers?
Some of the largest battery recycling companies on the market include Accurec Recycling GmbH, Retriev, and Umicore. Of the three, Retriev is the largest in North America while the other two command the European market. They are considered the key players in this emerging market and are expected to grow over time. Thus, they have valuable stocks that you may want to check out when you are ready to trade.
Can you make money from battery recycling?
You can make money from recycling batteries. In fact, there may be people that are starting small businesses just for this purpose. However, there may be challenges to this such as the methods used to recycles battery metals and the batteries themselves.
Alternatively, you can collect these batteries and sell them to companies that will recycle them and reuse them on newer batteries when they are constructed. Regardless, there is a good business model you can build on if you plan on collecting or even recycling lithium ion batteries or any related materials.
How to Invest in Battery Recycling Companies
There are many different platforms you can use to invest in battery recycling companies.
For example, using Acorns will allow you to invest in a wide range of companies with little effort. This is an automated investment platform that makes micro-investments in a portfolio of stocks and ETFs on your behalf.
If you want more control over which companies you invest in, you can use a traditional broker such as Charles Schwab. These will allow you to buy and sell stocks of individual companies as well as mutual funds and ETFs.
Final Thoughts on Battery Recycling Stocks
If you are interested in battery recycling stocks, there's a market that is getting stronger by the day.
Thanks to the rapid growth of the electric vehicle market, lithium batteries are being produced at an astounding rate. Because of this, lithium battery recycling is only going to grow as the EV batteries reach the end of their life.
It's important that you do your due diligence before deciding on a stock.
With every investing opportunity, there is a risk. Remember that diversifying your portfolio is key instead of putting all of your eggs in one basket.
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