U.S. Battery Recycling Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2025 - 2032)

U.S. Battery Recycling Market Growth Factors

Government Regulations and Incentives Are Key Trends

• Government regulations and incentives mainly drive the U.S. battery recycling market.
• Several federal and state government entities have implemented tight regulations regarding battery disposal, which steer businesses toward developing sustainable recycling methods.
• The Inflation Reduction Act issues business tax benefits of 30% to firms establishing battery recycling infrastructure, while the Department of Energy allocates funds for recycling technology advancement.
• In December 2023, the IRS and the U.S. Department of Treasury released the guidelines related to the clean vehicle provisions of the Inflation Reduction Act.
• Under this, vehicles that meet the sourcing criteria for both the battery components and critical materials get a credit of USD 7,500, while those that meet either of the two criteria are eligible for a USD 3,750 credit.
• The criteria are for a minimum percentage of the total materials in an EV, by weight, to either be processed or extracted in the U.S. or any country it has a free-trade agreement with, or be recycled in North America.
• The percentages were set at 40% for 2023, 50% for 2024, 60% for 2025, 70% for 2026, and 80% from 2027 onward.

Growth in Electric Vehicle Adoption Is Major Market Driver

• Electric vehicles (EVs) sales are expanding at a rapid pace in the country, thus influencing the battery recycling market.
• As per the International Energy Agency (IEA), registrations of new electric cars in 2023 increased by 40% compared to 2022, with of 1.4 million electric cars getting registered in the U.S. in 2023.
• Automakers’ pursuit of electric vehicle development and emission elimination goals create a substantial rise in the lithium-ion battery demand.
• Their rising sale produces increasing quantities of used batteries, which require suitable disposal solutions or modification for alternative uses.
• The recycling industry continues to transform its operations to extract lithium, cobalt, and nickel materials from spent batteries, in order to decrease the dependence on fresh mining resources.

U.S. Battery Recycling Market Segmentation Analysis

Battery Type Analysis

The lead–acid category had the largest revenue share in 2024, of 60%. This is because automobiles, industrial facilities, and backup power systems heavily depend on this battery type. The established recycling infrastructure enables near-total salvaging of lead–acid battery materials, which makes them one of the most-widely recycled battery types in the country. Effective recycling can recover lead, as well as plastics and electrolytes, to create new batteries without the requirement for fresh materials.

The category is dominant because the strict environmental laws of the country require correct disposal methods and recycling of lead–acid batteries, as all of their materials are highly toxic. The leading companies in the market possess ample waste processing capabilities and a continuous supply chain for recycled material distribution.

The battery types analyzed here are:

• Lead–Acid (Largest Category)
• Lithium-Ion (Fastest-growing category)
• Nickel-Metal Hydride
• Others

Application Analysis

The transportation category dominated the market in 2024 with a share of 50%. This growth is due to both the significant quantity of end lead–acid batteries of conventional vehicles and the swelling number of EV batteries that need replacement. The lead–acid batteries used in cars, trucks, and industrial vehicles have a mature recycling infrastructure. The increasing adoption of electric vehicles thus drives this category by creating a high demand for sustainable recycling of standard vehicles’ SLA batteries and EVs’ lithium-ion batteries and the recovery of associated materials.

The applications analyzed here are:

• Transportation (Largest Category)
• Consumer Electronics (Fastest-growing category)
• Industrial
• Others

Recycling Process Analysis

The U.S. battery recycling market is dominated by the hydrometallurgical process with 54% share because it extracts lithium, cobalt, nickel, lead, and other metals with high effectiveness and minimum environmental damage. The usage of chemical solvents for recovering metals from batteries is increasing as recyclers focus on sustainable practices, combined with efficient resource management.

The lower operating temperatures of the hydrometallurgical process reduce production expenses and greenhouse gas emissions, when compared to the pyrometallurgical technique. The higher yield and precipitation development from solvent-based extraction improve metal quality, thereby enabling large-scale operations. The increasing EV sales and renewable power storage requirements drive both strategic and financial investments to further advance hydrometallurgical recycling methods.

The recycling processes analyzed here are:

• Hydrometallurgical (Largest Category)
• Pyrometallurgical (Fastest-growing category)
• Physical/Mechanical

Material Analysis

Metals led the market in 2024 with a revenue share of 55%, because lead, lithium, cobalt, and nickel are extensively reclaimed from used batteries. The recovery of metals from used batteries plays a fundamental role in battery manufacturing because it lowers the demand for fresh mining and builds a circular economy framework. The metal content is 69% lead in SLA batteries and 5.3% lithium, 2.7% cobalt, and 2.6% nickel in Li-ion batteries. Hence, reclaiming them offers the most value for their usage in new batteries or other applications.

The materials analyzed here are:

• Metals (Largest Category)
• Electrolytes (Fastest-growing category)
• Plastics
• Others

U.S. Battery Recycling Market Regional Outlook

The Midwest region led the market in 2024 with a value share of 40%. This is because it has well-established battery recycling infrastructure and a strong industrial base, which drives recycling activities and propels the demand for the reclaimed material, respectively. The automotive and general manufacturing industries, which have existed for a long time in Indiana, Ohio, and Michigan, generate substantial lead–acid battery recycling demand. The Midwest maintains its market dominance because many major recycling companies operate here and are developing best practices.

The regions analyzed here are:

• Northeast
• Midwest (Largest Category)
• West (Fastest-growing category)
• South

U.S. Battery Recycling Market Share

• The U.S. battery recycling market consists of major recycling enterprises, together with expanding startups supported by government programs, which increases market competition.
• The lithium-ion battery recycling sector operates with limited competition because the associated infrastructure has yet to develop.
• On the other hand, key players, such as Exide Technologies and Battery Solutions, dominate the lead–acid and multi-chemistry segments.
• New players and technology-focused startups continue to enter the lithium-ion battery recycling market because of the rising demand for these energy sources and their individual materials, which offers opportunities.
• Various government incentive schemes and investments in sustainable recycling technologies motivate an increasing number of companies to setup reprocessing and salvaging operations, thus making the U.S. battery recycling market moderately fragmented.

U.S. Battery Recycling Market News & Updates

• In November 2023, Redwood Materials partnered with Toyota Motor Corporation to establish end-of-life options for the batteries utilized in Toyota’s hybrid and battery electric vehicles. This partnership seeks to uphold circularity by recycling and reintegrating recovered metals into the battery supply chain.
• In August 2023, American Battery Technology Company revealed the acquisition of an unoccupied, ready-to-move commercial-scale industrial facility situated at the Tahoe-Reno Industrial Center (TRIC). This facility focuses on the recycling of lithium-ion batteries.