By Lucas Bettle

 

Canada is currently at a major crossroads concerning EV battery recycling, with significant increases in both end-of-life batteries and demand for raw materials anticipated in the coming years. There are more than 600,000 EVs on the road in Canada today (Jones, 2025), with more than 40 million globally (IEA, 2024).

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The Government of Canada has committed to achieving 100% zero-emission vehicle sales by 2035 for all new light-duty vehicles, including interim targets of at least 20% by 2026 and at least 60% by 2030, spurring on EV adoption (Government of Canada, 2024). In Canada, at least 93,000 EV batteries will need recycling by 2040, and as many as 500,000 by 2045 (Jones, 2025).

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Despite these trends, Canada has no regulatory framework in place to establish EV battery recycling requirements, leading to uncertainty for automotive manufacturers, EV battery recyclers, and investors.

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How EV Batteries Are Recycled

 

In vehicles, EV batteries last an estimated 12 to 15 years. They retain 80% of their capacity after use in vehicles and can last up to 10 years when repurposed. These used batteries can have a second life as backup power or energy storage for solar and wind at utility and commercial scales (Huether, 2025).

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"Since they can be used for another 10 years for solar backup, etc., does this not make it less of a concern right now as to how we recycle these?  We recycle them, but we should repurpose them for secondary uses as long as possible before recycling." - Axel Doerwald, CEO, Lark Scientific

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After secondary use, batteries can be recycled to recover critical minerals. They are first disassembled and shredded, creating a powdered mixture of cathode and anode materials. The black mass then undergoes extraction and refining processes similar to those used on fresh ore to recover materials suitable for new battery production. This process allows for recovery of 90 to 99% of nickel, cobalt, and lithium (Dunn, 2023). 

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Today, the majority of EV battery recycling feedstock comes from manufacturing scrap, and this is expected to remain the case through 2030. This manufacturing scrap consists of defective components, rejected batteries, and leftover materials from the production process, such as faulty cathodes, anodes, and other components that do not meet quality standards or are surplus to requirements. As more batteries from EVs and secondary applications reach their end-of-life, they will become the main feedstock by around 2035 (IEA, 2024).

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Both of these types of recycling face a variety of economic, environmental, and technical challenges. EV battery materials have stringent quality requirements, making extraction and refining difficult and potentially costly, especially in the face of cheaper material imports. You cannot just buy a used EV battery and install it in your house due to a lack of clear regulations, safety certifications, and the complex, expensive technical challenges of repurposing and integrating these large, high-voltage systems. Even secondary use poses challenges, requiring safe battery transportation and disassembly, battery assessment, and reassembly in a new configuration (Huether, 2025). 

While second-life applications for EV batteries are a promising concept for energy storage, significant regulatory and technical hurdles must be overcome before this becomes a simple or readily available option for consumers.

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EV Battery Recycling Industry Outlook

 

Globally, annual EV battery demand is expected to grow to 9.1 TWh by 2035 (equivalent to batteries for 120 million Tesla Model Ys). Existing and announced mining projects will only meet 39%, 69%, and 62% of the projected annual demand for lithium, nickel, and cobalt. (World Economic Forum, 2025) Most of these metals are mined in Australia, Indonesia, and the Democratic Republic of Congo. However, Canada is the 4th largest cobalt producer at 2.2%, with 5.3% of the known world reserves. (Natural Resources Canada, 2025)

 

China accounts for 80% of battery pretreatment and almost 85% of material recovery, with North America, Europe, and Korea making up most of the remainder (IEA, 2024).

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Material recovery, in the context of electric vehicle (EV) battery recycling, is the process of extracting valuable metals like lithium, nickel, and cobalt from end-of-life batteries and battery production scrap.

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One of the largest EV battery recyclers in North America, Toronto-based Li-Cycle, filed for bankruptcy in 2025 after failing to get a planned facility in Rochester, NY, off the ground. Another Li-Cycle plant was opened in Kingston, ON, in 2019, but closed in 2024 (Jones, 2025).

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Lithion Technologies in Quebec is a facility currently producing black mass from EV batteries. Electra Battery Materials has been operating a trial facility since 2022 but has yet to reach commercial production. They aim to build a new plant in Ontario that would start recycling batteries by 2027. In British Columbia, RecycLiCo Battery Materials Inc. is working toward refining minerals from black mass for resale into the EV battery supply chain. (Jones, 2025)

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The Absence of Canadian Regulations and Reliance on Industry Initiatives​

 

Despite an increasing supply of end-of-life EV batteries and strain on critical mineral resources, the Canadian government has passed no regulation specifically addressing EV battery recycling and has announced no plans to do so. However, pressure is increasing on Environment and Climate Change Canada (ECCC) and provincial governments to take action now (Jones, 2025).

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Extended producer responsibility (EPR) is one potential avenue to implement policy. These programs set requirements for manufacturers and other parties to ensure end-of-life management, often including recycling or disposal costs. In Canada, these policies are determined by individual provinces and territories. They can cover a wide range of products, with packaging, plastics, and consumer batteries being common examples (Government of Canada, 2017).

 

"This should be managed federally. The fact that the provinces manage these means that there will be a chaotic and haphazard set of rules for manufacturers to follow." - Axel Doerwald, CEO, Lark Scientific

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Several provinces have proposed adding EV batteries to EPR programs, but none have done so. In 2021, British Columbia announced that it would add EV batteries to its extended producer responsibility program by 2026, but the addition was cancelled as of 2025 (Jones, 2025). Quebec also considered adding EV batteries to an extended producer responsibility program in 2021, but has dropped those plans (Jones, 2025).

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The lack of implementation in British Columbia and Quebec is particularly significant, as these two provinces accounted for the highest and third-highest new EV registrations in 2024. Together with Ontario, they made up 92% of new EV registrations in Canada (Chung, 2025).

Instead, EV battery recycling has largely fallen on voluntary industry action. The EV Battery Recovery Program is an industry initiative led by the Canadian Vehicle Manufacturers’ Association (CVMA), Global Automakers of Canada, and Call2Recycle Canada. A pilot project launched in Quebec in 2023, collecting more than 3,000 EV batteries in 2024 alone. The program was expanded nationwide in June 2025 (Yakub, 2025).

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The service offers free pickup of EV batteries and provides safe transportation to processing partners. Vehicle owners and businesses, such as garages or dealerships, can reference a provided list of vehicle brands and corresponding pickup contacts. For some brands, this is the manufacturer, while the majority partner with Call2Recycle to handle pickup (Yakub, 2025).

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The Government of Canada does provide some support for EV battery recycling operations through the Clean Technology Manufacturing Investment Tax Credit. One area covered by the credit is the recycling of qualifying minerals, including lithium, cobalt, nickel, and others. The credit covers sorting, disassembly, shredding, and mineral processing. The tax credit rate is 30% of the capital cost of eligible property, but is set to be reduced to 20% in 2032 (Government of Canada, 2024).

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Regulations and Incentives in Other Markets

 

The 2023 EU Battery Regulation is often cited as a strong example of EV battery recycling policy. It sets minimum recycling efficiency, requiring a certain percentage of batteries, by mass, to be recycled out of those reaching end-of-life, with higher standards coming into effect at the end of 2025, 2027, and 2031. There are also minimum quotas for recycled content in new batteries coming into effect in 2031 and 2036 (IEA, 2024).

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Alongside these requirements is the need for tracking and documentation. Starting in February 2027, EU Battery Regulations will require new EVs to have individual battery passports, accessible via a unique identifier. These passports will include a variety of information about the vehicle, including carbon footprint details, battery composition, end-of-life management, and access to technical documentation. These requirements will be phased in through 2031 (Stretton, 2025).

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These battery passports are being developed by a variety of third-party organizations, often in collaboration with national governments. The Global Battery Alliance and Battery Pass are two notable initiatives meant to align with EU requirements. There are no announced upcoming requirements for battery passports in Canada or the US. However, a variety of automotive manufacturers and industry groups are developing their own systems, with the 2025 Volvo EX90 SUV already being the first EV to feature a battery passport (Carey, 2024).

 

While the US lacks the type of regulations seen in the EU, the Inflation Reduction Act does provide significant economic incentives for recycling activities in the country. The act lays out a variety of incentives for both manufacturers and buyers with the caveat that specific thresholds must be met for the percentage of manufacturing and processing done in the US, or in some cases in North America or countries with existing free-trade agreements. The act treats materials that are recycled in the US as being of US origin, regardless of original source, providing a significant advantage over both new and recycled materials from other countries (Carey, 2023).

 

Canada Faces an Urgent Need for Government Action on EV Battery Recycling

 

Canada’s EV battery recycling industry has seen setbacks with facility closures, but organizations continue to emerge and advance in the space as well. Any initiative to facilitate recycling has been largely industry-driven. However, the lack of government action has left Canada at a competitive disadvantage compared to other markets.

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The lack of both direct regulation and economic incentives makes investing in EV battery recycling projects in Canada riskier in the face of an uncertain future and constantly shifting international market forces. Federal and provincial governments are falling behind at a critical juncture and must take action to keep the Canadian industry competitive.

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References

1. Carey, N. (2023). Dead EV batteries turn to gold with US incentives. 

2. Carey, N. (2024). Volvo to issue world’s first EV battery passport ahead of EU rules.

3. Chung, E. (2025). Who owns an EV in Canada? 3 provinces dominate EV registrations. CBC News.

4. Dunn, J. (2023). How Are EV Batteries (Actually) Recycled? The Equation.

5. Government of Canada. (2017). Overview of extended producer responsibility in Canada. 

6. Government of Canada. (2024). Canada’s Zero-Emission vehicle sales targets. 

7. Government of Canada. (2024). Clean Technology Manufacturing (CTM) Investment Tax Credit (ITC). 

8. Huether, P. (2025). Repurposing EV Batteries for Second-Life Stationary Storage: Market Landscape and Key Challenges. ACEEE.

9. IEA. (2024). EV Battery Supply Chain Sustainability. 

10. IEA. (2024). Trends in electric cars . 

11. Jones, A. M. (2025). Canada had big EV battery recycling plans, but without regulations it’s the ‘Wild West,’ expert warns. Retrieved from CBC News.

12. Natural Resources Canada. (2025). Retrieved from Cobalt facts.

13. Stretton, C. (2025). EU battery passport regulation requirements. Circularise.

14. World Economic Forum. (2025). Powering the Future: Overcoming Battery Supply Chain Challenges With Circularity. 

15. Yakub, M. (2025). EV Battery Recovery Program goes nationwide. Retrieved from Electric Autonomy Canada.