India's dead EV batteries could be a ₹1 lakh crore goldmine: Study

A CSEP paper reveals that retired EV batteries could hold ₹1.01 lakh crore in recoverable minerals in India by FY2040-41.

Retired electric vehicle (EV) batteries, currently classified as “hazardous waste”, could contain minerals worth ₹1.01 lakh crore in India by FY2040-41, according to a working paper by the Centre for Social and Economic Progress (CSEP).

The paper projects annual EV sales to reach 9.1 million in FY2030-31 and nearly 49.9 million by FY2037-38.

The paper, by CSEP fellow Shyamasis Das and former research associate Kartik Nair, is scheduled to be published on September 29. It examines the potential of battery recycling in India, including EV sales, battery chemistry, recoverable minerals, recycling capacity and investment requirements.

“India should not wait for millions of retired EV batteries to accumulate before deciding to invest in building recycling capacity,” Das said. “The country is still early enough in its EV transition to build circularity into the system rather than retrofit it later.”

Titled ‘Battery circularity in India - A billion-dollar long-term opportunity: The case of EV batteries’, the paper estimates that India could recover around 573 kilotonnes (kt) of minerals from EV batteries between FY2026-27 and FY2040-41.

EV sales set to rise

India added nearly 8 million EVs between FY2016-17 and FY2025-26, most of them electric two- and three-wheelers. EVs accounted for 8.25% of total vehicle sales in FY2025-26, indicating significant room for further growth.

The paper projects annual EV sales to reach 9.1 million in FY2030-31 and nearly 49.9 million by FY2037-38. Electric two-wheelers are expected to account for the bulk of this growth, with annual sales rising from about 7.1 million to 40.1 million over the same period.

Electric buses and heavy trucks are expected to remain smaller segments, but their larger battery packs could still contribute significantly to recycling volumes.

India is currently 100% import-dependent for lithium, nickel and cobalt, which the Ministry of Mines classifies as critical and strategic minerals.

₹1 lakh crore worth of minerals

The paper estimates that recoverable minerals from EV batteries will total around 23 kt between FY2026-27 and FY2030-31, 118 kt in the following five years and 432 kt in the final five-year period up to FY2040-41.

Copper is expected to dominate by volume. However, lithium is projected to account for the largest share of the total value.

The recovered minerals are estimated to be worth ₹1,01,491 crore, or $11.94 billion at an exchange rate of ₹85 to the dollar.

Recycling could meet about 10% of India's lithium demand for EV battery manufacturing between FY2026-27 and FY2030-31, rising to around 12% in the following five years, according to the study.

“Done well, battery recycling can turn an end-of-life liability into a domestic resource, create a new industrial ecosystem and provide a modest but meaningful buffer against critical mineral supply shocks,” Das said.

Electric two-wheelers are expected to account for about 57% of all minerals available for recycling. They could contribute around 53% of the recoverable lithium, 60% of nickel and 63% of cobalt.

Electric passenger cars are expected to account for 24% of the minerals, while three-wheelers, excluding e-rickshaws, could contribute 15%. Medium- and heavy-duty EVs would account for about 1.2%, as their batteries generally last longer and can be used for second-life applications.

₹55,057 crore investment needed

Processing the projected volumes will require about 3,315 kt of recycling capacity by FY2040-41, the paper estimates.

This would require capacity of 122 kt in the first five-year period, 673 kt in the second and 2,520 kt in the final period.

The investment requirement is estimated at ₹55,057 crore. Of this, ₹2,028 crore would be needed in the first five years, ₹11,169 crore in the next five and ₹41,826 crore in the final period.

“A roadmap for investments in battery circularity is the need of the hour,” the paper says.

India's announced battery processing capacity is currently around 80 kt, while the Critical Mineral Recycling Incentive Scheme targets about 270 kt by FY2030-31.

The paper says these announcements “may appear sufficient” at first glance but warns that a much larger scale-up could be required in later years. The incentive scheme also covers e-waste and other scrapped battery streams.

Need to build capacity early

The authors argue that recycling capacity needs to be planned well in advance because setting up a plant can take several years, while recovery lines can take months to stabilise.

Operating at the required scale on a “just in time” basis is “unlikely to be feasible in practice”, the paper says.

The study also points to the practice of exporting “black mass”, an intermediate product generated during battery recycling. Some Indian recyclers currently export black mass, mostly to China, rather than establishing facilities to recover the minerals domestically.

“Continuing this is akin to letting precious resources leave the country's shores,” the paper says.

It cites a study that found at least 60% of Europe's black mass is exported outside the continent.

Lessons from EU, China

The paper draws lessons from recycling policies in the European Union and China.

The EU has set recovery targets of 90% for cobalt, copper, lead and nickel by 2027 and 95% by 2031. For lithium, the targets are 50% by 2027 and 80% by 2031. The EU also regulates black mass as hazardous waste and tracks its movement across borders.

China requires at least 90% recovery of lithium and 98% recovery of nickel, cobalt, manganese, copper, aluminium and rare earth metals.

The authors say India already has a foundation in the Battery Waste Management Rules, 2022, and point to the proposed Battery Aadhaar framework.

Ten priority interventions

The paper recommends 10 priority interventions to strengthen India's battery recycling ecosystem.

Among other measures, it calls for a stronger policy push to create domestic demand for recycled minerals and recommends mandating recycled minerals as part of the national critical mineral stockpile.

It also calls for technical standards, greater testing infrastructure and better take-back programmes, noting that the current system for collecting spent EV batteries remains “fragmented”.

Other recommendations include regulating black mass flows, harmonising safety rules for the collection, storage and transportation of batteries, and creating long-term partnerships between vehicle and battery manufacturers and recyclers.

The authors also recommend revisiting the Battery Waste Management Rules, 2022.

They argue that collection targets of 70% for 2024-25, 80% for 2025-26 and 90% from 2026-27 are based on conservative assumptions about battery life and could encourage “forced” early retirement of batteries.

The rules also do not have mineral-specific recovery targets, the paper says.

Recycling could lower EV costs

The potential benefits, according to the study, extend beyond recovering minerals.

A reliable battery recycling and supply chain ecosystem could give EV manufacturers greater supply certainty and price predictability. Lower battery costs could, in turn, help reduce EV prices.

The paper notes that the higher upfront cost of EVs compared with conventional vehicles remains a barrier in India's price-sensitive market.

A larger recycling ecosystem could also create opportunities for recyclers, refurbishers and repurposers while helping formalise a solid-waste sector that remains largely informal.

The study estimates that if two- and three-wheelers reach a 100% electric share by FY2037-38, recoverable minerals could increase by 445 kt, adding around ₹73,600 crore in economic value.

The opportunity requires “concerted planning and preparatory actions today”, the paper says, warning that otherwise it “may turn out to be a missed opportunity for the industry”.

CSEP said the views expressed in the paper are those of the authors and do not necessarily represent the institution's views.