A tall pile of electric vehicle batteries stands in the courtyard of the recycling plant of ERLOS Produktion und Montagen, here in the middle of nowhere, in eastern Germany. Some are packed in wooden boxes, others in metal cages, while the smaller ones, from hybrid vehicles, are in plastic containers. All around them, like an automotive chop shop, are car interior and exterior parts: bumpers, tires, sheet metal parts and airbags (encased in aluminum boxes). Everything worth anything is here on its way to recycling. But batteries are the jewel in the crown: they contain rare earth metals that take years to mine, refine and transport around the world, and they embody the promise of one of the great 21st century revolutions: electric transport.
The batteries don't look so fancy after they've been used. Some of them arrived here, at a large industrial site near the eastern German city of Zwickau, after they'd reached the end of their lives and stopped charging properly. Others were shipped due to production failures. Some are actually secret prototypes produced by anonymous car companies. Photography in the yard is prohibited. In the meantime, they're placed in fire-proof containers to slowly discharge their dangerous electrical charge. The largest, looking like the top of a grand piano, come from electric trucks. The smallest, from hybrid vehicles, are placed two in a row. These are the "normal" ones, from the cars that are meant to be the future of transportation. The lie side by side on a metal grill - one for the plus, one for the minus - releasing the electricity stored inside them.
This plant is one of the few in Germany that recycles electric vehicle batteries. In the coming months, a duplicate plant will be built in Israel by a partnership led by veteran car importer Colmobil (importer of Hyundai, Mitsubishi, and Mercedes as well as Chinese brands Ora, Omoda and Jaecoo), together with Dash (electronic waste recycling) and the Silvers brothers, owners of recycling company EMS Metals. They will build, by the end of next year, the first plant in Israel for recycling vehicle batteries, under a partnership called Mili Recycling for Israel. Colmobil owns 83% of the new company.
Batteries from car wrecks, end-of-life batteries, and defective batteries will end up in Neot Hovav, at a facility currently being built at a multi-million-dollar investment. The $10 million battery recycling plant is a highpoint for ERLOS, and for its line supplier Peter Hessler.
Hessler, a German businessman in his 60s, heads URT - Umwelt und Recyclingtechnik, a German family-owned industrial company that has become a leader in the growing field of recycling lines for electric vehicle batteries, or anything related to lithium-ion or NMC (nickel-manganese-cobalt) batteries. He started out recycling refrigerators 30 years ago (the liquid used for cooling required special protocols due to its environmental hazard) before coming across the sector that’s making him a lot of money now. He says, "Car companies don't have the focus or the ability right now to invest in recycling their batteries. They are busy with other things, competing for power or range or design. We solve their problem."
"The world champions in recycling"
With a lot of patience, and aided by European regulations that are slowly embracing the need, his company - a model for the German Mittelstand (medium-sized family-owned companies with a few dozen employees - has specialized in manufacturing large battery recycling plants. He proudly presents his "baby," module by module, step by step, along the hundreds of meters that a battery will travel from disassembly to final products. "We Germans are the world champions in recycling," he says proudly.
Hessler is right. It’s no wonder that a plant like this was established in Germany. It is the seventh so far in the country, and there are orders for eight more plants, including the one in Israel. Recycling these batteries will begin to address one of the biggest problems posed by electric vehicles: the fact that their battery effectiveness is time-limited, and works efficiently only for a certain length of time, but exactly how long, no one yet knows.
Roni Kaufman, EVP Business Development at Colmobil, on a visit the ERLOS recycling plant to learn from their experience with the recycling line purchased from URT, says that battery life was once thought to be seven years, "but there are batteries that have lasted with high efficiency for ten years or more." In any case, battery production requires a lot of resources, especially rare earths mined at great effort around the world, such as cobalt from Congo, lithium from South America, manganese, and more. The mining conditions and access to metals are difficult, the environmental pollution involved in their production is great, as is the human exploitation; there are also illegal mines, many in Africa, taking advantage of the rare earths rush.
Therefore, recycling these rare elements from batteries is both the order of the day and - with government regulation - commercially viable. ERLOS operations manager for battery recycling, Phillip Steinbock, who heads the Zwickau operation, calls it "urban mining." "It is important to understand that all the fuel cells for these batteries are manufactured in China or South Korea with unique technology," he explains. It turns out that the Chinese have a several-decade advantage over the European-American industry.
A recent report by the International Energy Agency found that 90% of fuel cells for batteries are made in China. Even companies that say they make their own batteries, like Tesla, in fact do so, based on cells made in China (in Tesla 's case, BYD), and simply assemble them in a proprietary fashion. The cells are made of these rare earths, in secret amounts, and an electrolyte used to create the electric current. All are then mixed with iron and plastic and wrapped in aluminum or alloys. "It's like the Coca-Cola recipe," says Hessler. "No one outside of China and South Korea can produce exactly the same thing today with their efficiency." The Chinese obtain raw materials from around the world to do this.
So, what is the EU doing? It is relying on the world champions in recycling, namely the Germans, and is trying to recycle the batteries whose basic parts are shipped from China. It aims to obtain the metals through recycling, not mining. To do this, it has enacted a directive which stipulates that a percentage of every battery in the future must be made from recycled elements. The rate will increase over time. This move creates a market for the main product of the enormous machine that stands and vibrates behind the doors here, waiting to shred and tear apart the discharged batteries, separate them into components, and finally produce the current holy grail of industry: 'black mass'.
Squeezing the juice out of batteries
Before we enter, Steinbock explains this is a new factory, inaugurated only six months ago, and that he headed its construction. "The boss was so pleased that he decided that I would stay here to supervise the activities," he notes. We begin with a tour of the batteries, and then Steinbock opens the doors to a facility several hundred meters long, a huge strip consisting of dozens of compartments, reservoirs, filters, and conveyor belts. Hessler smiles like a proud father.
It starts with a pile of stripped batteries being loaded into an elevator. "To expose the batteries from their insulation, we sometimes have to disassemble them by hand," he says. At present, there are no standard protocols. At a nearby table, a large man weighing almost 200 kilos, leans on a crowbar that, after much effort, separates the adhesive connecting the fuel cells to their aluminum shell. The exposed batteries are loaded onto small carts, like those in mines, that are raised almost to the maximum height of the building.
"Our plant will be an organized line, we have much more space, and it will be much more mechanized and orderly," says Kaufman. At the top of the elevator, the carts are tilted down like bins on garbage collection day, and the batteries are pushed into the shredding chamber. We climb to the control room next to it, and we can see what it looks like: a row of columns made of special steel, like that used for milling, with teeth waiting to tear the cells apart, extract the electrolyte, and break them into pieces that can later - with the help of a series of basic or complex chemical procedures - be separated into their various elements.
The electrolyte is the dangerous part, mainly because it is flammable. For this reason, shredding inside the recycling chamber is done under reduced oxygen conditions of only 5% (compared 20-21% in the atmosphere), and the chamber is completely sealed. Hessler is proud of this sealing as its where his experience with refrigerators comes into play. "So far," Steinbock reveals, "there has only been one time when a battery that was not completely discharged was accidentally put in. We saw a spark for a second, but it didn't ignite because there wasn't enough oxygen, the nitrogen was enough to prevent a fire. Production was stopped, but there was no damage, just a lot of smoke." They have since added a pre-loading check to make sure that batteries are fully discharged, and connect the terminals with a metal cable to keep them that way. (It turns out that batteries can recharge "from the air" if they lie around waiting too long).
From there, everything moves quickly. Steinbock says that after the shredding, the liquid is evaporated, condensed, then washed with water (which is stored and then disposed of in a special way). The pulp that results from shredding the batteries, minus the electrolytes, is heated in giant mixers, like a clothes dryer, then partially cooled and passed through a series of filters and strainers, among other things. Magnets pull out the iron. First comes the copper, then the plastic, and then finer plastic. Somewhere in the middle of the process, large pieces of iron and then fine iron dust are accumulated in bags and containers.
At the end of the almost a kilometer-long production process, what’s left is coalesced into two downward-pointing nozzles, through which the "black mass" is poured into special, sealed bags, under a large sign proclaiming in German "Schwarze Masse." Both Hessler and Steinbock are delighted with the black powder, which looks almost liquid, containing manganese, graphite, lithium, nickel, and cobalt.
Batteries double in number annually
In total, says Steinbock, "From the complete battery you saw outside, we manage to recycle something like 95%. A quarter of that is the black mass, another quarter is the aluminum and metal, and there are a host of other elements, including plastic and copper and the fluids and everything that made up the battery that accelerated the electric car relatively quickly until a few hours ago." Instead of mining cobalt in illegal mines in Congo, Steinbock’s team obtains it from the black mass.
"Today I sell it for two or three euros per kilogram," says Steinbock, who cannot give an exact figure. He is expected to handle 1,000 tons in the coming year. "Our biggest problem is where to get the batteries," he says. The plant’s parent company, WP Holding, has a contract with Mercedes, and currently receives a large portion of its battery supply from those plants. In the future --and this should be the bonanza - there will be a huge number of discarded batteries on the market. Because of the high penetration rate for electric vehicles, the number of batteries thrown out is expected to double every year. Even in conservative Germany, electric vehicles are increasingly becoming more popular and the need for recycling will be enormous.
The two German executives are clear that the future of transportation is electric cars. Steinbock drives a hybrid BMW, and Hessler has a large collection of cars, including a fully electric BMW that he uses regularly. They say that "Germany made a mistake by not jumping on this bandwagon early enough." "But that’s how it is," adds Hessler. "When your whole world is the internal combustion engine, you think things are going to go that way on forever."
The internal combustion engine is intertwined with Germany's economic history, and some would say it is a major part of its success story. Coincidentally, the cities of Zwickau and Chemnitz were centers of German industry and its early automobile industry, because they were close to the necessary coal and steel sources. Even after the Allies destroyed Chemnitz almost completely, due to its centrality to German industry, the East Germans (who renamed the city Karl Marx Stadt) produced the famous Trabant (the iconic communist vehicle, produced from 1957 to 1990, that ran on a two-stroke engine), and other vehicles there. The automobile industry has generated enormous profits for Germany and is also responsible for its prosperity until recent years.
But Germany’s lead has slipped through its fingers. The EU is leading a comprehensive reform aimed at putting an end to the internal combustion engine, and is already committed to selling the last gasoline-powered car by 2035. Meanwhile, the Chinese are gaining momentum in electric vehicle production and development, and companies like Tesla are owning innovation. As a result, the industry is in crisis, with a 60% drop in sales for companies like Volkswagen and future factory closures, along with wage cuts, which are being made to prevent mass layoffs.
One out of four new cars
The whole of Europe came late to the electric car party. Now, the EU has begun imposing protective tariffs on Chinese brands that take advantage of the fact that fuel cells are Chinese-made to offer very attractive prices, while also benefitting from government subsidies.
At the same time, Germany last year ended government subsidies for electric cars. Until then, consumers were offered a bonus of up to €5,000; this is now frozen due to a lack of budget, and consumers are waiting to see what happens. But as a result, sales of electric vehicles in Germany have plummeted. In 2024, 380,000 fully electric vehicles were sold there - just one in five, a drop of almost 30% from the previous year. Sales of hybrid vehicles, on the other hand, rose by 13% to 950,000 units. Charging stations are rare in Germany, both in cities and on the roads, and the long distances between cities connected by expressways discourage many from buying a fully electric car.
In Israel, on the other hand, one in four new cars are electric, and the trend in recent months has been on the increase. This is also one of the reasons why an Israeli factory is needed, Kaufman explains. The European directive on battery recycling has not yet been adopted in similar legislation in Israel, but the government is a signatory to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal. It stipulates that if a country has a recycling infrastructure, it must use it before shipping the materials for recycling overseas, as is done today. Israel may be a small market, but the penetration of electric vehicles is rapid and wide-ranging. The factory now under construction will be able to handle 20,000 tons of batteries per year. "Colmobil may benefit from used batteries from vehicles returned to it for various reasons," Kaufman says, "but ultimately, the majority are expected to be end-of-life batteries, that is, batteries from the used car market."
The important thing for the company is that a profitable international market will be created for that "black mass." At the moment, they hope that the "Brussels effect," which makes environmental legislation the norm, together with the help of the economic power of the EU, will prove itself in this area as well. "That's what's great about metal recycling and battery recycling in general," says Hessler. "In the end, we're talking about chemical elements, not complex materials. It's not plastic, where the recycled version is weaker and only suitable for a certain product class. There's no difference between the elements produced from the black mass and the element produced in mining."
Hessler is very proud that the entire process can be done safely "in a neighborhood" and cleanly. "This is the second URT plant I've visited," says Kaufman, "and every time I'm impressed by the process, which is done entirely automatically, and the quality of the material that is produced. And most importantly, the process meets the highest standards in terms of environmental quality. This technological advantage was very important to us."
At the moment, the future looks pretty bleak for Germany and its automotive industry. But the ERLOS plant shows that it is not resting on its laurels. Unlike the giant German companies, family companies like URT have also proven their ability to adapt quickly and provide solutions with very high reliability. Hessler --whose son is now entering the business-- says that he is about to open a recycling plant in no less a place than China. "There are two possible reasons for the Chinese to be interested. Either they want to do business in Europe and are using our company to make connections, or they want to learn how to recycle without polluting the environment." In any case, he says, "Never underestimate the ability of German industry to innovate and produce."
Published by Globes, Israel business news - en.globes.co.il - on February 10, 2025.
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