LFP batteries dominate the market, but recycling remains an economic puzzle

LFP batteries, cheaper to produce and cobalt- and nickel-free, now account for 61% of the global market in 2026. But recycling them costs more than the value of the recovered materials, posing a major challenge for the circular economy.

Why LFP batteries appeal to automakers

Lithium iron phosphate (LFP) chemistry has conquered the market: its share rose from 20% in 2020 to 61% in 2026, according to Benchmark Mineral Intelligence. Tesla kickstarted the trend in 2020 with its Chinese-made Model 3, drawn by lower production costs and the absence of cobalt, an expensive and controversial metal. "It requires less plastic and fewer interconnections, and this architecture now makes more economic sense," explains Eric Frederickson, vice president of operations at The Battery Network.

Recycling that doesn’t pay off

The problem arises at end-of-life. One ton of LFP batteries contains 300 to 350 kg of iron (€0.10/kg) and 40 to 60 kg of lithium (€600 to €1,200/tonne). Phosphorus, however, has almost no value. Result: recyclers lose between €700 and €1,700 per tonne processed. In contrast, NMC (nickel-manganese-cobalt) batteries yield between €4,000 and €8,000/tonne, with similar recycling costs. In North America, some recyclers already charge €1.40 to €1.90/kg to accept LFP batteries, due to the lack of resale value.

In France, the Rénovabat plant (Nantes) and its Swiss partner Ecobat highlight the gap: from 100 kg of NCA batteries, they recover 80 kg of lithium with a margin of €1,116 to €1,146. With LFP batteries, containing only 50 kg of lithium, the margin drops to €630-660, a third less.

RecommendedSolar panels: 90%+ recycled after 25 years in FranceNews · August 30, 2026

Technical solutions exist, but they’re not yet profitable

Three methods coexist. The hydrometallurgical route, the industrial standard, dissolves materials in an acid bath: it recovers 95% of lithium with 98% purity, at a cost of €150 to €250/tonne. Pyrometallurgy, via fusion at 800-1,000°C, recovers only 70% of lithium and loses all phosphorus. Finally, direct recycling, which preserves electrodes, achieves near-100% efficiency but costs €2,500 to €4,000/tonne — a prohibitive price today.

China, the global leader in LFP production (CATL, BYD), accepts unprofitable recycling to secure its lithium supply. In Europe, industries are betting on second-life applications (stationary storage) to delay the recycling deadline. According to Didier David, project director at Orano, the sector will need to process 500,000 tonnes of batteries within ten years.

“Advances in batteries are helpful, but they are not the definitive solution.” — Tony Dutzki, senior analyst at Frontier GroupTranslated from French

The success of LFP batteries shows that the economic equation for electric vehicles extends beyond production. Without recycling innovation or subsidies, their end-of-life could weigh on the energy transition. China has already made its choice: it accepts the cost. Europe, however, is still searching for its path.