Battery Recycling Industry Faces Uncertainty Amid Trump Clean Energy Rollbacks

In Covington, Georgia, Ascend Elements operates a cutting-edge battery recycling facility that transforms dead lithium-ion batteries into valuable lithium carbonate, a key ingredient for electric vehicle (EV) batteries and energy storage systems. This facility is the only domestic source of recycled lithium carbonate in North America, marking a significant step toward reducing reliance on mining and foreign supply chains.

However, the U.S. battery recycling industry now finds itself in a precarious position. Since January 2025, the Trump administration has rolled back many of the Biden-era clean energy initiatives, freezing grants and loans, and stalling renewable energy projects. These actions have created uncertainty for battery recyclers who rely on government incentives and a thriving clean energy manufacturing sector to grow.

Interestingly, while Trump’s policies have slowed clean energy expansion, his administration simultaneously prioritizes domestic production of critical minerals like lithium for national security and economic reasons. This dual approach has led to a complex environment where battery recyclers see potential benefits from tariffs and trade restrictions aimed at reducing dependence on China, the dominant global supplier of battery metals.

Federal support for battery recycling continues to some extent. For example, Ascend Elements, American Battery Technology Company, and Cirba Solutions have active Department of Energy (DOE) grants and contracts to expand recycling capacity. These projects aim to produce battery-grade metals domestically, reducing reliance on imports and supporting the EV supply chain.

Yet, the industry faces risks from potential repeal of key tax credits under the Inflation Reduction Act (IRA), which currently subsidize domestic production of critical minerals from recycled materials. The House-passed budget bill threatens to eliminate some clean energy tax incentives, which could stall new battery and EV manufacturing projects — the primary sources of recyclable battery materials.

This creates a feedback loop: fewer new EV batteries manufactured means less production scrap and end-of-life batteries available for recycling, which in turn limits the growth potential of the recycling industry. Currently, about 40% of recyclable battery material in the U.S. comes from production scrap, with used EV batteries and grid storage batteries making up smaller portions.

Trade tensions add another layer of complexity. The U.S. imposed tariffs on imports from South Korea, a key refining partner for U.S. recyclers, risking retaliatory tariffs that could disrupt export markets for black mass, the intermediate recycled material. However, recyclers are actively working to build local refining capacity to reduce exposure to international trade risks.

Despite these challenges, industry leaders remain cautiously optimistic. They recognize the strategic importance of domestic critical mineral production for national security and the energy transition. Some companies are diversifying their lithium sales beyond batteries to industrial applications like ceramics and glass to ensure economic viability amid market uncertainties.

Why Battery Recycling Matters More Than Ever

The global push to transition off fossil fuels hinges on massive deployment of batteries to power EVs and store renewable energy. This surge drives unprecedented demand for lithium, cobalt, nickel, and other metals. Mining these metals is environmentally destructive and geopolitically risky, making recycling a critical strategy to secure supply chains and reduce ecological impact.

China currently dominates battery manufacturing and recycling, benefiting from supportive policies and abundant manufacturing scrap. The U.S. aims to catch up by fostering domestic recycling capacity, but this requires stable policy support, investment, and a robust clean energy manufacturing ecosystem.

The Trump administration’s mixed signals—supporting critical mineral production while rolling back clean energy incentives—have created a limbo for battery recyclers. The industry’s future depends on reconciling these policies to sustain growth and meet the urgent demand for sustainable battery materials.

Navigating the Road Ahead

Battery recycling companies are adapting by:

• Building local refining capacity to reduce reliance on foreign partners and mitigate tariff risks.
• Diversifying lithium product applications beyond EV batteries to maintain economic viability.
• Monitoring policy developments closely to leverage available federal grants and incentives.
• Engaging with policymakers to advocate for stable, long-term support for clean energy manufacturing and recycling.

In conclusion, the U.S. battery recycling industry stands at a crossroads. It holds the key to a sustainable, secure supply of critical minerals essential for the clean energy transition. Yet, it must navigate a shifting political landscape, trade challenges, and funding uncertainties. The path forward requires innovation, resilience, and strategic alignment with evolving national priorities.