With EV incentives rolled back, recyclers assess long-term demand and shift focus to critical minerals and industrial sourcing.
U.S. lithium-ion battery recyclers are adjusting their business plans as the Trump administration pulls back federal support for electric vehicles and clean energy. At the same time, the government is increasing its push to produce more critical minerals like lithium and cobalt within the U.S.
Several clean energy incentives, such as EV tax credits and recycling grants have been rolled back. This has raised concerns in the battery recycling sector, which previously relied on old programmes to scale operations. Batteries made up 87% of global lithium use in 2024, according to U.S. Geological Survey data.
Despite a drop in EV sales in the Q2 of 2025, the U.S. still saw a 1.5% year-on-year growth in EV sales during the first half of the year. The administration has used emergency powers to speed up mining approvals and reduce reliance on foreign mineral imports.
While these efforts focus on new mining, recyclers argue that extracting minerals from used batteries is faster, cheaper, and supports the same goals.
Some recycling projects have stalled. Li-Cycle, backed by a $475 million DOE loan, filed for bankruptcy in May. Ascend Elements delayed a new facility and lost a $164 million grant after a customer dropped out.
In contrast, Redwood Materials secured $2 billion in private funding and continues to build near Reno. Cirba Solutions, backed by federal funding, is building a plant in South Carolina to process 60,000 tonnes of used batteries annually.
Battery demand is expected to rise 27% per year through 2030 (McKinsey). Recyclers are now focusing on local supply chains, defence contracts, and co-locating facilities near EV factories to reduce cost and risk.
