Leading the Charge: EV Battery Recycling in India

The public and private sectors have invested significantly in electric vehicles (EVs) to lower carbon emissions and lessen reliance on fossil fuels, leading to India’s revolutionary transition towards clean transportation. The Indian EV market has grown rapidly because of programs, such as the Production-Linked Incentive (PLI) scheme, the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) II, and state-level incentives. India is now one of the world's fastest-growing EV markets thanks to a sharp increase in EV sales, especially because of electric two and three-wheelers.

This expansion also brings with it a severe problem: managing EV batteries sustainably. Most of EVs are powered by lithium-ion batteries (LIBs), which have a limited lifespan of six to ten years. India has a severe problem with waste management and environmental sustainability because of the anticipated increase in battery disposal. Unlike lead-acid batteries which have a well-organised recycling ecosystem with an efficiency of over 90%, recycling lithium-ion batteries is in its initial stages.

India is progressively moving towards a structured approach, as seen by regulatory interventions like the Battery Waste Management Rules (2022), which incorporate the Extended Producer Responsibility (EPR) concept. The growing interest in this industry is also seen by the emergence of firms like Lohum, Attero, and Tata Chemicals. Establishing an effective EV battery recycling ecosystem will be essential to attaining sustainable mobility as India strives for net-zero emissions by 2070.

The Indian EV market

• Increasing EV adoption

  The EV market is expanding at an unseen rate owing to changes in consumer preferences regarding sustainable mobility, government regulations, and technology breakthroughs. The government has aggressively encouraged EV adoption through subsidies, incentives, and restrictions in response to concerns about air pollution, rising fuel prices, and carbon emissions.

  

  Source: Fortune Business Insights, F- Forecasted

  According to Fortune Business Insights, in 2023, the EV market was estimated to be worth US$ 8.03 billion. The market is anticipated to expand at a compound annual growth rate (CAGR) of 22.4% from US$ 23.38 billion in 2024 to US$ 117.78 billion by 2032.

  There is an increasing demand for electric vehicles brought on by growing environmental awareness and cost efficiency which EV owners benefit from. This rising demand of EV’s contributed to India's booming automobile sector, which currently ranks fifth in the world, and is predicted to move to third by 2030. Since India imports 80% of its crude oil needs, relying solely on conventional energy sources is inappropriate. Furthermore, by 2030, India wants to increase the percentage of EV sales to 30% for private automobiles, 70% for commercial vehicles, 40% for buses, and 80% for two- and three-wheelers. By 2030, there will be 80 million EVs on Indian roadways, which is an ambitious goal. Additionally, India's Make in India campaign aims to produce all EVs domestically. This growth is fuelled by multiple factors:

Government support and policies

• Faster Adoption and Manufacturing of Electric Vehicles (FAME) II: A subsidy scheme offering incentives for EV purchases and charging infrastructure development.
• Production-Linked Incentive (PLI) Scheme: Encourages domestic manufacturing of EV components, including batteries, to reduce import dependency.
• Battery Swapping Policy: Aimed at standardising and promoting battery-as-a-service (BaaS) models, particularly for two- and three-wheelers.
• State EV Policies: Many Indian states, such as Maharashtra, Delhi, and Tamil Nadu, have introduced their own incentives for EV buyers and manufacturers.

Declining battery costs and improving technology

• Battery prices have fallen by 90% over the past decade, making EVs more affordable.
• Advances in lithium-ion battery technology, fast charging, and solid-state batteries are improving range and efficiency.

Rise of EV startups and market players

• Leading automakers like Tata Motors, Mahindra, Ola Electric, and Ather Energy are launching competitive EV models.
• The emergence of new players in the battery manufacturing and recycling space is creating a strong supply chain ecosystem.

Increasing charging infrastructure

• The number of public charging stations in India has increased significantly, with government and private investments accelerating deployment.

Current EV market breakdown

The EV industry in India is expanding significantly across several segments, each of which adds something special to the overall picture. With around 1.2 million sold, electric two-wheelers (E2Ws) accounted for around 60% of all EV sales in 2024, making them the leading force. Leading manufacturers like Ola Electric, TVS Motor Company, and Ather Energy, who together control more than 65% of the E2W market share, are the main drivers.

Electric three-wheelers (E3Ws) also showed robust performance, accounting for almost 35% of the market with 694,466 units sold in 2024, representing an 18% increase YoY. The broad use of this segment for last-mile connectivity in urban and semi-urban areas is primarily responsible for its growth.

Even though they only make up around 5% of the market in 2024 (99,848 sold), passenger electric cars saw a significant 6.9% gain in sales YoY. With more than 65% of the market, Tata Motors dominates this category, with MG Motor coming in second at 13%. Lastly, sales of electric buses grew significantly, increasing to 39% to 3,834 units in 2024. The objectives and incentives under the PM E-DRIVE plan, which are positioned to increase the adoption of e-buses across the nation's major cities, are anticipated to propel this rise quicker.

Government policies and initiatives

The Indian government recognises the importance of sustainable EV battery management and has taken significant steps to regulate battery recycling through policy frameworks and financial incentives. Given India’s ambition to become a global leader in EV adoption, establishing a well-structured battery recycling ecosystem is essential. The policies in place aim to encourage battery manufacturers, recyclers, and consumers to participate in a circular economy, ensuring that battery waste is minimised, and valuable materials are recovered efficiently.

Current policy landscape

Extended Producer Responsibility (EPR) Norms - The implementation of the Battery Waste Management Rules, 2022, which uphold the EPR framework, marks a significant turning point in India's battery recycling policy. EPR regulations impose legal obligations on battery manufacturers, importers, and recyclers to collect, recycle, and dispose of used batteries in an environmentally acceptable manner. Key provisions include:

• Mandatory collection targets for manufacturers, ensuring a significant percentage of EOL batteries are returned for recycling.
• Minimum material recovery targets, requiring battery recyclers to extract and reuse lithium, cobalt, and nickel.
• A digital tracking system to monitor the movement of used batteries and ensure compliance.
• Penalties for non-compliance, ensuring that companies follow environmentally responsible disposal practices.

By requiring manufacturers to assume accountability for the full lifecycle of their products, EPR can completely transform the recycling sector. By funding battery collection networks and encouraging customer involvement with buy-back programs or new battery discounts, they can be transformed into opportunities.

As part of the Union Budget 2025–26, the Indian government has emphasised on the production of EVs, their batteries, and the import and recycling of vital minerals from other nations in the. The measures introduced will help the EV and battery manufacturing industries. With an emphasis on small, medium, and large enterprises (MSME), the government announced intentions of establishing a national manufacturing mission to promote the production of electric vehicle batteries, motors, and controllers. The exemption of basic custom duty (BCD) on cobalt powder and waste, lithium-ion battery trash, lead, zinc, and 12 other essential minerals was also announced. This will help MSMEs manufacture these minerals. To support this initiative, the government allocated Rs. 410 crore (US$ 47.20 million) for the National Critical Mineral Mission in the budget estimate for 2025-26. Further, the budget allocation for production-linked incentive (PLI) Scheme for National Programme on Advanced Chemistry Cell (ACC) Battery Storage has also been increased from Rs. 15.42 crore (US$ 1.80 million) to Rs 155.76 crore (US$ 17.90 million). 

Conclusion

India's fast adoption of electric vehicles and growing environmental concerns are fuelling the country's EV battery recycling sector. Lithium-ion battery demand is expected to increase, reaching an estimated 600 GWh by the end of the decade, as the government plans to have 80 million EVs on Indian roads by 2030. However, a strong recycling ecosystem is required to address the economic and environmental issues raised by end-of-life batteries.

The Battery Waste Management Rules (2022) and the Extended Producer Responsibility (EPR) framework ensure that manufacturers actively participate in battery collection and recycling, minimising environmental hazards and promoting a circular economy.

Investments in domestic battery manufacturing and recycling facilities will progressively lessen India's dependency on imports for battery raw materials, even though 80% of lithium-ion cells are now imported from China, Japan, and South Korea. With growing financial incentives, regulatory backing, and technological developments, India is well-positioned to lead the world in recycling EV batteries. The nation can promote sustainable transportation, lower expenses, and open economic prospects in the clean energy sector by strengthening its recycling ecosystem.