Li-Cycle, once a leading force in North American electric vehicle battery recycling, recently sought bankruptcy protection in both Canada and the United States. The Toronto-based firm had envisioned a major facility in Rochester, New York, capable of extracting lithium and other critical minerals from used EV batteries for reuse in new ones. This capability, still elusive at commercial scale in North America, was intended to anchor a circular economy for EVs. Its collapse underscores a deeper structural problem: the absence of regulatory frameworks to support and stabilize the industry.
Canada now has over 600,000 EVs on its roads, and with each battery eventually reaching end-of-life, the challenge of keeping these units out of landfills grows more urgent. Yet, as Mark Winfield, professor at York University and co-chair of its Sustainable Energy Initiative, observed, “There really is no regulatory or policy regime around this in North America. It’s a Wild West.” Without policy drivers, he noted, the foundation for a viable recycling business is missing.
Reports from the International Energy Agency and the World Economic Forum have stressed the necessity of government regulation to ensure demand for recycled materials. The federal target of 100 percent zero-emission passenger car sales by 2035 lacks an accompanying national framework for battery end-of-life management. British Columbia, once poised to introduce such rules, has reversed course. Meanwhile, EV sales continue to climb, with 17 percent of new cars sold in Canada in 2024 being electric.
Winfield points to the European Union’s 2023 regulations as a potential model. These include mandates for recycled content in new batteries beginning in 2031 and expanded producer responsibilities to track battery lifespans. The IEA’s November 2024 report similarly recommended clear, long-term regulations to instill investor confidence.
Maria Kelleher, an environmental consultant with prior work for Environment and Climate Change Canada, emphasized that mandates for recycled content would create market certainty. “If the government says you have to have recycled content [in new batteries], it provides the recyclers with certainty, because the companies buying the product have to buy their product,” she said.
The recycling process begins with shredding spent batteries into “black mass,” a mix of lithium, nickel, and cobalt. This material is then refined to extract high-purity minerals suitable for new battery production. Lithion Technologies in Quebec and Electra Battery Materials in Ontario have produced black mass, but commercial-scale mineral recovery remains limited. Overseas, particularly in China and Southeast Asia, mineral extraction from black mass is already integrated into battery manufacturing.
Beyond recycling, some companies are pursuing second-life applications. EV batteries, now estimated to last 12–15 years in vehicles, retain about 80 percent capacity afterward and can serve another decade in stationary energy storage. Vancouver-based Moment Energy is repurposing old EV batteries into systems that provide backup power, manage peak demand, and store renewable energy. Co-founder Sumreen Rattan stated, “In order for this to truly be streamlined, I think having a federal policy would go a long way.”
Projections based on Canadian EV registrations since 2011 suggest that by 2040, at least 93,000 batteries will require recycling, with another 500,000 between 2040 and 2045. Winfield warns that failing to prepare infrastructure now would be “a monumental lack of foresight.”
Currently, Environment and Climate Change Canada defers responsibility for end-of-life battery management to provinces and territories, offering only voluntary programs and limited funding incentives. British Columbia’s withdrawal from its planned extended producer responsibility program mirrors Quebec’s decision to drop similar plans. Ontario, despite high EV adoption rates, relies on voluntary initiatives and has no regulatory requirements.
While automakers in Canada often arrange battery recovery and partner with recycling facilities, the absence of oversight leaves the effectiveness of these efforts uncertain. In contrast, the EU’s framework includes carbon footprint declarations, battery passports, and minimum recycled content thresholds. As Winfield put it, “Without a regulatory framework around this, there is no viable business model.”