Driving their efforts towards a circular economy for battery recycling, Lithium Australia (ASX: LIT) has inked an exclusive three-year agreement with global electric vehicle (EV) leader BYD Auto to significantly expand its battery recycling operations in Australia.
Under the deal, Lithium Australia’s subsidiary, Envirostream Australia, will handle all end-of-life batteries from BYD’s New Energy vehicles, helping scale the Company’s collection and processing of lithium iron phosphate (LFP) batteries. The partnership marks a milestone towards Lithium Australia addressing the growing need for efficient battery recycling as the world transitions to electric mobility where lithium-based batteries are all around us from consumer electronics to electric vehicles.
BYD Auto, the automotive division of Chinese battery conglomerate BYD Company (AUD market cap approx $141 billion) is a recognised leader in the EV market, delivering 3 million New Energy vehicles globally in 2023. Since entering the Australian market in 2022, BYD Auto has quickly gained momentum, now holding 14% of the nation’s EV market share. Their vehicles are powered by BYD’s Blade Battery, a product of over two decades of innovation in lithium iron phosphate technology.
The collaboration aligns with Lithium Australia’s strategy to establish itself as a key player in the battery recycling ecosystem. By securing agreements with leading original equipment manufacturers (OEMs) such as BYD Auto, Lithium Australia increases their capacity to scale its operations and reinforce its focus on lithium iron phosphate (LFP) battery processing.
“We are excited to announce the signing of an exclusive recycling agreement with BYD, the global leader in New Energy vehicles. This milestone achievement is expected to significantly increase our future collection volumes of large-format lithium-ion batteries (LIBs), further accelerating the Company’s shift in battery collections mix to be primarily focused on the higher margin large-format LIBs,” said Lithium Australia Managing Director, Simon Linge.
“The signing of this milestone agreement, alongside the various other exclusive recycling agreements announced in recent times, are evidence of our successful execution of the Company’s recycling growth strategy. We look forward to working alongside BYD and look to leverage this momentum to drive further collections growth in FY25.”
Battery recycling is seen as an essential component of the global shift towards sustainable energy and transportation. With supply for electric vehicles rising, managing the lifecycle of batteries has become a priority. The recycling process allows valuable materials like lithium, cobalt, and nickel to be extracted from old batteries and reused in the production of new ones, reducing the need for mining and lowering environmental impact.
For BYD Auto, the agreement underscores its dedication to environmental sustainability and growth ambitions in Australia. By partnering with Lithium Australia, BYD aims to ensure that the end-of-life batteries from its vehicles are responsibly managed, reducing their carbon footprint and reinforcing their leadership in green technology.
The role of battery recycling will be pivotal as the world embraces electric vehicles, with research forecasts estimating that by 2030, millions of tonnes of batteries will reach the end of their useful life. Efficient recycling systems will not only mitigate the environmental risks posed by discarded batteries but also help conserve scarce resources by reintroducing recycled materials into the manufacturing supply chain.
Across the full year ended 30 June 2024, Lithium Australia collected a total of 1,542 tonnes of batteries for recycling, representing a 14% increase on FY23 (FY23: 1,347 tonnes).
From those efforts, the Company generated $6.7 million of revenue, primarily related to the recycling division. Associated recycling cost of sales were $4.5 million to deliver a gross profit of $2.2 million for the year (FY23: $1.5 million).
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, bloodstock enthusiast and former Analyst.
Latest posts by Alfred Chan (see all)
- ARC Funds acquires 30% of auzbiz Capital as latest direct-to-investor marketing venture - October 8, 2024
- Apiam appoints Bruce Dixon as Director, strengthening leadership with Greencross expertise - October 7, 2024
- IG data reveals fresh investor confidence following inflation-induced market lull - October 4, 2024
Leave a Comment
You must be logged in to post a comment.