Mercedes opening its own NMC battery recycling plant a safe bet?

Mercedes-Benz has finally opened its own battery recycling plant in Kuppenheim, southern Germany, using Primobius’s technology. It’s Europe’s first battery recycling plant using an integrated mechanical-hydrometallurgical process: shredding battery modules and chemically washing out and drying ‘precious’ materials.

The company expects more than a 96 percent recovery rate for valuable and scarce raw materials such as lithium, nickel, and cobalt to be reused in 50,000 new NMC battery modules annually. However, is this a save bet as recycling cheaper LFP batteries, which have lesser energy density but longer lifespan and are prevalent in cheaper mass-produced EVs, is no option here?

Expensive rare materials

Lithium, nickel, and cobalt are expensive materials used in NMC (Nickel Manganese Cobalt) batteries, which Mercedes-Benz and most European carmakers use for their electric vehicles.

A typical EV battery has about 8 kilograms of lithium, 14 kilograms of cobalt, and 20 kilograms of manganese, although this can often be much more depending on the battery size. Cobalt is particularly ‘questionable’ because it is mined in inhuman circumstances in the Democratic Republic of Congo (RDC), which has the world’s largest reserves.

Concerns about sourcing cobalt from the RDC and nickel from Russia, where sanctions apply, have prompted manufacturers to look for alternative raw material sources, like recycling.

Moving to hydrometallurgy

The foundation stone for this battery recycling factory in Kuppenheim was laid in March 2023. The move to a hydrometallurgical process was not a surprise at that time, as it offered significantly higher recycling rates than the earlier pyrometallurgical processes in which some materials are burned.

Volkswagen also relies on hydrometallurgy for its pilot recycling plant in Salzgitter. However, as VW works with outside partners to complete the process, Mercedes claims a full-scale in-house project, the first in Europe, with the help of Primobius. The latter is a joint venture between Australian Neometals and German mechanical engineering company SMS Group GmbH.

The hydrometallurgical process is less intensive regarding energy consumption and material waste, using temperatures of up to 80 degrees Celsius. Mercedes says its recycling plant operates net carbon-neutral with 100 percent green electricity. That comes mainly from 6,800 square meters of solar panels on the factory rooftop, with a peak output of more than 350 kilowatts.

Praised by Chancellor Olaf Scholz

German Chancellor Olaf Scholz praised Mercedes’s management at the opening ceremony. “The future of the automobile is electric, and batteries are an essential component. To produce batteries in a resource-conserving and sustainable way, recycling is also key,” he said.

“The circular economy is a growth engine and, at the same time, an essential building block for achieving our climate targets! I congratulate Mercedes-Benz for the courage and foresight this investment in Kuppenheim shows. Germany remains a cutting-edge market for new and innovative technologies.”

Halting ACC battery factory plans

Mercedes says it will produce 50,000 new NMC battery modules per year. However, in June of this year, Bloomberg broke the news that Mercedes and Stellantis had halted the construction of their joint venture EV battery factories, called the Automotive Cells Company (ACC).

They are also reexamining their plans and considering switching to cheaper LFP batteries as they start to see more entry-level models equipped with LFP cells launched in Europe to bring costs down. Analysts say if ACC sees growth coming from the mass market side, then LFP cells would be a reasonable choice.

ACC, the joint venture between Mercedes-Benz, Stellantis, and TotalEnergies, unveiled big plans three years ago. By centralizing their research efforts and investing 7 billion euros, they would prepare enough battery cell output for their car brands to be fully electric. It laid out the blueprint for the production of more than 200 GWh annually in eight factories all over the world. There was no time to waste.

Lower cost batteries

LFP (lithium-ferro-phosphate) cells have several benefits: lower cost, higher thermal stability, reduced risk of overheating and fire, and more straightforward mineral sourcing. However, they have lower energy density than NMC cells, resulting in less range for an EV. But new cell-to-pack techniques allow improvements in EV range and price.

According to global management consulting firm Bain, LFP has “taken significant share from NMC since 2018 due to improvements in energy density at sustained lower cost”. And it predicts that LFP will become more dominant owing to “robust demand for cheaper mass-market EVs”.

In China, LFP was already used in 64% of electric vehicles in 2023, compared to 34% for NMC, which will become 70% in 2030. Outside of China, Europe and the US, this was only 7% LFP and 68% NMC in 2023, becoming 15 to 20% LFP in 2030, 65 to 70% NMC.

Recycling challenge

According to specialists, the shift back towards LFP battery chemistries has implications for recycling. It poses a huge challenge to recyclers because there are no expensive and very relevant materials inside the batteries that make recycling profitable: there’s no nickel and no cobalt.

Studies show that recycling lithium-ion batteries via conventional recycling methods using pyrometallurgy and hydrometallurgy is largely unprofitable for LFP. So that’s no option for Mercedes’s new Kuppenheim plant.