Battery recycling startups have sprung up in Europe in a bid to tap into the next big opportunity in the electric vehicle market: wasted batteries.
Among them is Cylib, a German-based start-up with a niche that automakers can find financially attractive. The company says it can extract pure forms of all the materials into a battery using a fraction of the energy used by competitors.
This means Cylib is able to recover all elements from EV and micromobility batteries, as well as production scrap — including lithium, cobalt, nickel, aluminum and manganese — using 30% less energy than competitors.
Cylib CEO and co-founder Lilian Schwich is betting that this secret sauce will give the startup an edge over rivals with more resources and longer value chains, such as Swedish incumbent Northvolt and American heavy hitter Redwood Materials. Massachusetts-based Ascend Elements also made a recent European play by forming one joint venture with Polish startup Elemental.
It was enough to attract backers from the climate, deep tech and corporate automotive industries, said Schwich, who spent more than a decade researching methods of recycling batteries with efficient energy sources at RWTH Aachen University before founding the startup in 2022.
Earlier this month, Cylib raised a €55 million Series A, led by the World Fund and Porsche Ventures, the VC arm of sports car maker Porsche. Bosch Ventures, DeepTech & Climate Fonds, NRW.Venture and others also participated in the round.
Cylib will use the funds to build its new industrial-scale facility in Aachen with an opening date of 2026 and add more staff to its team of 60 employees. In the long term, Cylib wants to expand beyond Germany and into other European markets.
“In our production cycle, we raised 7.6 million euros and with that we created a pilot facility where we are already able to recycle one EV battery pack per day, that is about 300 to 600 kg per day,” said Gideon Schwich, Cylib’s O co-founder and COO and husband of Lilian Schwich, told TechCrunch. “In a Tesla you have about 300 kg and in a Porsche about 600 kg.”
Capacity today, descents tomorrow
Cylib has already established relationships with automotive OEMs, Tier 1 suppliers and lithium refiners to secure battery production scrap for near-term recycling. These partnerships are critical to Cylib’s long-term success and continued supply of raw materials, ensuring access to end-of-life EV batteries for future recycling.
Securing raw materials (such as batteries and production scrap that can be processed at recycling facilities) is also important for Cylib today so that it can demonstrate to manufacturers that it has the ability to handle industrial-scale recycling.
“The problem with battery recycling is that if you don’t have the capacity, the big guys won’t give you raw material,” Anil Achyuta, managing director of TDK Ventures, the venture arm of Japanese electronics giant TDK Corporation, told TechCrunch. “And if you don’t have raw material, you won’t have capacity.”
Achyuta said TDK Ventures, which invests in Cylib competitor Ascend Elements, helped the startup prove its worth in 2021 by “making a big swing in the market” and investing heavily to build capacity and buy raw material . Today, Ascend’s US facilities can process 26,000 tons per year.
Besides feedstock and capacity, Achyuta says that as an investor, what he really wants to see in battery recycling companies is a plan to produce active cathode materials in the future, because that’s where the real money is. The cathode is the part of a lithium ion battery that stores energy and releases it when a battery is used and is usually made of metal oxides such as lithium cobalt oxide or lithium manganese oxide. In other words, battery recycling startups should go beyond battery recycling and material refining to remanufacturing cathode materials.
Today, most battery recycling companies export battery materials to China and other parts of Asia to develop active cathode materials, which are then shipped back to automakers and battery manufacturers at home. This goes against circular economy principles.
Schwich said Cylib has plans to produce active cathode materials in the future, but doing so on an industrial scale is not a top priority until the startup gets its new facility up and running.
“We have the strongest added value in the market with what we do best, which is to produce truly green and pure raw materials in a technology grade or battery category,” said Schwich. “But that doesn’t mean these materials can be used directly to make new cells. There are a few more steps to go through and that’s something we’re already developing with our partners now.”
