The Trump administration is scrambling the clean energy supply chain, especially via new tariffs. However, there’s one sector that might be at an immediate advantage: battery recycling.
In January, the consultancy group Clean Energy Associates predicted that the U.S. prices for battery technologies could rise by more than 35%. That was before Donald Trump took office for his second term, bringing with him steep levies that are bound to impact battery manufacturing.
The paused but still pending 25% tariffs on Canadian imports, for instance, could drastically affect the prices of many of the critical minerals the battery industry relies on, given that Canada is the biggest importer of minerals to the U.S. China, for its part, has already tightened its critical minerals exports in retaliation to the additional 10% levy on Chinese imports that came into effect earlier this month. Meanwhile, Trump has raised the possibility of a 10% to 20% universal tariff on all foreign goods.
Experts mostly agree that these protectionist measures will create hurdles for the clean energy transition — especially in combination with other Trump policies. For instance, the president has already paused Inflation Reduction Act and Bipartisan Infrastructure Law funding, and has promised to dismantle the former altogether.
However, if your job is to take apart what’s already in the country and reutilize it, these tariffs could be a boon — at least in the short term. That’s according to Andy Leach, energy storage associate at BloombergNEF.
“For example, there are no cobalt mines in the U.S.,” he told Latitude Media. “But if you can recycle lots of cobalt-based batteries like LCOs, which are used in consumer electronics in many cases, that is a way of producing a material that is not naturally occurring in your country.”
Canada supplies 15% of U.S. cobalt imports, and the rest from countries like Norway, Finland, and Japan; if a universal tariff, as Trump promised in his campaign, is actually enacted, recycled cobalt could become cheaper than imported.
A short-term boon
Eric Gratz, co-founder and chief technical officer at Ascend Elements, one of the biggest EV battery recyclers in the U.S., thinks the insulation from tariffs is a “real advantage” of using recycled materials.
“If we were a battery manufacturer that relies on virgin materials, we would 100% have to import those, and they would most likely be subject to tariffs, because Canada and China are two large producers of those materials,” he said. “But since we rely on domestic materials through recycling, we’re not impacted.”
Ascend Elements has an operational facility in Georgia, where it recycles batteries and produces lithium carbonate, and another that is under development in Kentucky. The Kentucky facility will use the lithium-stripped nickel and cobalt ore that is a byproduct of its battery recycling, and refine it to pCAM, which becomes cathode material once mixed with lithium.
The company plans to sell the resulting material domestically. In fact, once operational, Ascend expects its Kentucky facility to be “the first commercial-scale pCAM plant in North America, and the first critical mineral recovery plant to make these materials for new energy technologies,” Gratz said.
Nishchay Chadha, CEO and co-founder of battery recycling technology platform Ace Green Recycling, agrees that tariffs could give his business a boost.
“Recycling is the most viable path forward to produce ‘made in America’ batteries,” Chadha told Latitude Media in an email, adding that export tariffs should also be taken into consideration as well, given that the U.S. is exporting battery materials that often end up in Asia.“In 2023, the U.S. exported a few hundred million dollars worth of lead waste or scrap. Through recycling, all of this valuable material could have been kept within the country.”
The domestic supply chain
The benefits aren’t limited to recyclers alone; companies that have already invested in the domestic supply chain are also looking at an advantage.
Sanjiv Malhotra, CEO of Sparkz, a cathode active material manufacturer for lithium iron phosphate batteries, thinks the Trump administration tariffs will have a “very positive” effect on his company, which he founded in 2020 intending for it to have a North American, and predominantly U.S. supply chain.
“Our North Star and singular focus is ensuring that we establish manufacturing here in the United States, and tariffs obviously will help and are much needed,” he said. “We can’t be a developer of technology and let that technology be manufactured in China.”
Of course, there are other factors that impact a company’s success. Ascend, for instance, received two grants totaling $480 million from the Department of Energy in 2022, funded by the infrastructure law; those have been integral in building its Kentucky plant. Tesla — which has its own battery recycling program and is led by Trump’s right-hand man Elon Musk — benefitted from LPO loans to the tune of $465 million in Tesla’s early days.
But political uncertainty is complicating the availability of this government funding. The Trump administration has placed a freeze on large swaths of clean energy funding, and the future of LPO’s loan availability is an open question. For the startups in the battery and battery recycling sectors that would typically seek that support, the uncertainty is certainly bad for business. Ascend’s Gratz confirmed to Latitude Media that they have already withdrawn most of the money from one of their two grants, so the current pause on funds is not a major concern for the company.
(Editor’s note: The day after this piece was published, on February 27, Ascend announced that it agreed with the DOE to cancel the smaller of its two grants: $164 million for CAM production at its Kentucky plant.)
However, both Gratz and Malhotra are holding fast to optimism. Both noted that the Trump administration’s focus on the development of a U.S. critical minerals supply chain aligns with battery recyclers and U.S.-based battery manufacturers’ goals. Malhotra, for instance, is confident that Sparkz will be able to access the $9.8 million DOE grant it was awarded last October once the Trump administration’s temporary funding freeze is over.
“One of the big things for President Trump and his administration is making sure that these critical minerals are manufactured and processed here,” he said. “And that is what Sparkz is doing as far as LFP batteries are concerned.”
Long term problems
In the long term, however, the situation risks becoming more complicated.
As a consequence of the tariffs and other policies implemented by the Trump administration, BNEF adjusted its 2030 forecast for EVs as a share of new passenger vehicles from 48% to 33%, a change that Leach called “significant.” And fewer EVs on the road also means fewer batteries for recyclers to use.
“Ford’s CEO said just a couple of days ago that tariffs on steel are going to be really painful for Ford,” Leach said. “If that has a negative impact on sales, it has a negative impact on the whole supply chain, including people making stuff locally.”
Plus, he added, the shroud of uncertainty that Trump’s will-he-won’t-he attitude towards policy decisions has cast on the clean energy transition is hardly good for business.
“Uncertainty is not helpful for anybody, whether you’re an automaker, a battery manufacturer, or a recycler,” he said. “It makes people delay decisions, and delays slow things down. Even if the outcome is not what you want, there’s value in knowing what it is.”
Gratz agrees that there might be a slowdown in the transition to EVs, but he’s confident it’s going to be a small one.
“I view this transition as happening regardless of policy,” he said, “because in a couple of years, your EV will be cheaper than your gasoline vehicle, and they also tend to be more fun to drive.”
