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Climate change and energy

2023 Climate Tech Companies to Watch: GEM and its battery recycling factories

By mining electronic waste and retired EV batteries, GEM makes battery manufacturing more sustainable.

October 4, 2023
GEM E-Waste green treatment site.
GEM

Explore the 2023 list of 15 Climate Tech Companies to Watch.

Building on two decades of experience in recycling batteries and electronics, GEM is doing the essential work of making electric vehicle batteries greener, giving them a second life by repurposing them or extracting the minerals they contain.

Intro 

The world of clean tech is built on a lot of minerals—lithium, nickel, cobalt, magnesium, tungsten—that primarily come from mines. But the Chinese recycling company GEM has its eyes on another source: the tons of electronics and batteries that are discarded every day. From factories it calls “urban mines,” GEM breaks down these devices, extracts the minerals, and remakes them into raw materials.

GEM, which stands for Green Eco-Manufacture, was founded in 2001 to recycle small batteries used in everyday items and later began processing all kinds of electronic waste. GEM’s versatile factories can dismantle different kinds of batteries, and its hydrometallurgical extraction techniques are more effective at removing critical materials than competitors’ methods. For example, GEM can recycle over 90% of lithium from used batteries and extract nickel from materials that contain less than 0.1% of the metal. Batteries that still have 60% or more of their original recharging capacity are reused in mopeds or street lamps; the rest are crushed for mineral extraction.

In the past several years, as the number of electric vehicles has surged, the company has found more demand for its technology. According to GEM, it has signed deals with over 650 auto companies and EV battery makers, including Mercedes-Benz and Toyota, to recycle their retired batteries. 


Key indicators

  • Industry: Battery recycling
  • Founded: 2001
  • Headquarters: Shenzhen, China
  • Notable fact: GEM recycled over 17,000 tons of EV batteries in 2022, which was more than 10% of all the EV batteries retired in China that year.

Potential for impact

While electric cars are cleaner than gas cars, mining the raw materials for EV batteries often contaminates the environment and leads to labor and human rights abuses. Recycling batteries offers a cleaner, more ethical way to power the global energy transition.

This kind of technology is now more important than ever. The current generation of batteries typically lasts five to eight years. Chinese EV makers started to sell consumer EV models around the mid-2010s, so it’s about time to retire those batteries. Globally, market analysts have estimated that the battery recycling industry will triple from $17.3 billion in 2022 to $54.3 billion by 2030. 

Around the world, the number of EVs sold is predicted to grow by double digits every year for the next decade, which means many countries beyond China will need millions more batteries, too. Producing and recycling them will become essential in the transportation industry, and GEM is well positioned to be a major global player.

Caveats 

While GEM leads the battery recycling industry in its home country, there’s a lot of competition. As of November 2022, 88 Chinese companies had received government licenses for EV battery recycling. There are also tens of thousands of small, unlicensed businesses paying a premium for retired batteries. This creates an unregulated industry rife with unfair competition, and it means GEM cannot guarantee that it will have access to enough retired EV batteries to meet its own production targets. 

Some of GEM’s competitors have better access to retired batteries because they’re affiliated with either an automaker or a battery manufacturer; GEM has less security in its supply as a third-party recycler. 

There’s also a lot of uncertainty about the future. The Chinese battery recycling industry has not consolidated yet, with top players each claiming nearly 10% of the market. Even though GEM recycles the most lithium batteries among Chinese companies today, that could change.

Meanwhile, because demand for the stuff that goes into batteries has outgrown the capacity of battery recycling, GEM is no longer just recycling batteries, it’s also buying raw materials like nickel and cobalt, and, lately, even mining these metals itself. Those mines could worsen the company’s overall climate impact.

When

Recycling and manufacturing EV batteries is already a profitable business. GEM’s total revenue grew 52% in 2022, mostly from selling materials for making nickel-cobalt-manganese batteries.

The potential—and competition—will only grow from here. According to an interview by the Chinese publication New Energy Vehicle Daily with Zhang Yuping, a vice president of GEM, the industry’s capacity to recycle EV batteries is growing at a rate of 30% to 50% every year. 

Next steps 

While GEM’s work of recycling other electronics, like appliances, has been overshadowed by the rise of EVs, it remains important for the environment and for GEM’s bottom line. 

GEM is now expanding its global footprint and the kinds of materials it recycles. It currently has recycling plants in South Korea, Indonesia, and South Africa, and says it’s looking at potential sites in Europe. Building plants outside of China has a practical advantage: it allows GEM to benefit from the Inflation Reduction Act in the US, which requires some part of a company’s supply chain to be on the soil of American allies to qualify for subsidies. 

In July, the Chinese government announced it would restrict the export of germanium and gallium, two minerals used in chips, fiber optics, and other devices, for national security reasons. GEM later said it will seize the opportunity to grow its business in recycling the two materials and other rare minerals. 

Explore the 2023 list of 15 Climate Tech Companies to Watch.

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