Why EV Battery Recycling Is Entering a New Phase

DOE-backed pilot programs show direct recycling could cut energy use and costs, as policymakers and manufacturers explore reuse-first models for EV batteries

30 Jan 2026

Efforts to make the electric vehicle supply chain more sustainable are turning to a once-niche idea: direct recycling of batteries. Backed by US government research funding, pilot programmes suggest the approach could cut energy use and costs as millions of EV batteries near the end of their first life.

Direct recycling aims to recover and refurbish key battery components, such as cathodes, rather than breaking packs down into basic raw materials. Supporters say this preserves more of the battery’s embedded value while reducing waste and emissions compared with conventional recycling.

Momentum has been driven in part by the Department of Energy’s ReCell Center, which is working with laboratories and industry partners to test the process at pilot scale. The DOE says early results indicate fewer processing steps and lower energy demand than traditional methods, although large-scale commercial deployment has yet to be proven.

The interest comes as battery makers face pressure to localise supply chains and reduce dependence on imported materials. Existing recycling techniques are well established but energy intensive, often requiring metals to be reprocessed before they can be reused in new batteries.

Industry analysts say the economics of recycling are also changing. Newer battery chemistries rely less on cobalt and other high-value metals that once helped offset recycling costs. As those materials decline, more efficient recovery methods become more important.

The timing is significant. EV sales continue to rise in the US, and a growing volume of used batteries is expected over the next decade. Direct recycling is being viewed as a possible bridge between environmental goals and commercial realities, particularly as manufacturers promote circular economy strategies that keep materials in use for longer.

Obstacles remain. Battery packs differ widely in design, chemistry and condition, making standardised processing difficult. Regulations were largely written around older recycling models and are still evolving. Companies also raise concerns about intellectual property and data sharing as new techniques move closer to market.

Even so, interest is growing. Federal research funding, closer collaboration between public laboratories and manufacturers, and rising policy attention are pushing the concept forward.

Recycling is no longer a secondary issue for the battery industry. As pilot projects expand and rules adapt, direct recycling could become a core part of a more resilient EV battery ecosystem.