French automaker Renault is exploring a lucrative business prospect by partnering with companies to extract  and recycle lithium and other metals in EV batteries, creating a circular economy that can bring in billions of dollars and reduce reliance on China.

According to Automotive News Europe, Renault aims to be the first European automaker to recycle batteries on an industrial scale.

“In Europe, there is currently… nobody who can claim to recycle used batteries in a closed-loop to reproduce nickel, cobalt and lithium to make new batteries,” said Jean-Philippe Bahuaud, CEO Renault’s environment unit, called The Future Is Neutral (TFIN), which was launched in 2022.

For now, Renault is in discussion with “specialist companies” that are already at an “advanced” stage of recycling that can help Renault up its game.

Back in October, Stellantis announced it has signed a memorandum of understanding with hydrometallurgical metal recovery expert Orano, to establish a joint venture focused on recycling EV batteries and production waste materials from its plants around the world.

It’s all part of a European strategy to become less dependent on China for metals used in batteries, with most of the metals powering EVs mined and processed outside of Europe.

Of course, using recycled metals could help drive costs down in that they account for 70% of a battery’s cost, and batteries are 40% of an EV’s cost.

Next month, Renault will stop production of new vehicles at its Flins factory in Aubergenville, France, and shift to production of partially recycled vehicle parts and reconditioned cars, Automotive News Europe reports.

Bahuaud said that the company expects the factory to repair 9,000 batteries this year. Renault sells the batteries and other parts such as reconditioned electric engines and chargers at a 30% discount to new products.

Renault is targeting sales of 2.3 billion euros ($2.49 billion) from its TFIN business, with an operating margin of more than 10% by the end of the decade.

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