Ternary lithium battery recycling used to be treated mainly as an environmental issue, but it is now becoming a supply chain strategy. The reason is simple: ternary batteries contain valuable materials such as nickel, cobalt and lithium, and these materials face price volatility, geographic concentration and compliance risks. Recycling is not only about treating spent batteries; it is about building a “second mine.”

According to the U.S. Geological Survey, batteries accounted for about 88% of global lithium end uses in 2025. Global lithium production increased by 31% from 2024, while global lithium consumption increased by 20%. As electric vehicles and energy storage continue to expand, retired batteries, manufacturing scrap and production waste will become important sources of materials.

Ternary lithium batteries are especially important for recycling because their cathode materials contain higher-value metals such as nickel and cobalt. The U.S. Geological Survey notes that the cobalt content of lithium-ion batteries is being reduced and cobalt-free alternatives using iron and phosphorus have gained significant market share in China, but cobalt remains a highly sensitive critical material in the global supply chain.

Policy is also turning recycling from an option into a hard requirement. The EU Batteries Regulation requires lithium recovery from waste batteries to reach 50% by the end of 2027 and 80% by the end of 2031. Recovery targets for cobalt, copper, lead and nickel are 90% by the end of 2027 and 95% by the end of 2031. EV batteries and industrial batteries will also gradually face minimum recycled content requirements.

This means three changes for ternary battery companies. First, battery design must consider disassembly, traceability and recyclability, not only manufacturing efficiency. Second, battery makers, automakers, recyclers and material companies need to form closed-loop partnerships. Third, recycled nickel, cobalt and lithium will gradually enter supply chain management and international trade compliance systems.

In the future, the competitiveness of ternary lithium batteries will not only depend on new battery performance, but also on material value after retirement. Companies that build stable collection channels, master efficient sorting and hydrometallurgical technologies, and reintroduce recycled materials into cathode production will gain stronger resilience against resource volatility.