Li-Cycle Provides Recycling Solutions to Growing Battery Energy Storage System (BESS) Market, Including Supporting Artificial Intelligence Technologies in the U.S.

Rhea-AI Summary

Li-Cycle Holdings Corp. (NYSE: LICY) reports significant growth in its Battery Energy Storage System (BESS) recycling operations. In 2024, the company recycled over 100 MWh equivalent of battery feedstock from U.S. BESS partners, marking a 33% increase from the previous year. During Q4 2024, BESS materials represented approximately 27% of the company's U.S. recycling feedstock.

The U.S. energy storage market is projected to expand from 34.4 GWh in 2024 to approximately 67.5 GWh in 2028, primarily driven by grid-scale applications. Li-Cycle's services support domestic energy independence and supply chain onshoring through BESS recycling and critical material recovery. The company has successfully handled various BESS projects, including processing severely damaged battery modules and managing a large-scale recycling operation of approximately 60 MWh of modules for an environmental services company.

Positive

• 33% year-over-year increase in BESS recycling volume to over 100 MWh in 2024
• BESS materials represent 27% of U.S. recycling feedstock in Q4 2024
• Operating in a market expected to nearly double from 34.4 GWh to 67.5 GWh by 2028

Negative

• None.

Insights

Energy Storage & Sustainability Analyst

The latest operational update from Li-Cycle reveals compelling growth trajectories in the battery energy storage system (BESS) sector, with several strategic implications for investors:

Market Position & Growth Metrics

• The 33% year-over-year increase in BESS recycling volume to over 100 MWh demonstrates strong execution in a rapidly expanding market
• BESS contributing 27% of U.S. recycling feedstock in Q4 2024 indicates successful market penetration and diversification of revenue streams
• The projected growth of U.S. energy storage market from 34.4 GWh to 67.5 GWh by 2028 represents a substantial addressable market expansion

Strategic Advantages

• Li-Cycle's demonstrated ability to handle urgent, large-scale projects (60 MWh case study) and hazardous materials positions them as a preferred partner for critical infrastructure
• The company's role in supporting AI data center energy demands aligns with one of the fastest-growing sectors in technology infrastructure
• Their contribution to domestic supply chain security through local critical material recovery strengthens their strategic importance in the U.S. market

Business Implications

• The rapid processing capabilities and flexible operations showcase operational efficiency that could lead to premium pricing power
• Growing BESS market share suggests potential for improved economies of scale and margin expansion
• The company's position in the AI infrastructure supply chain could lead to long-term strategic partnerships and stable revenue streams

While these developments signal positive operational momentum, investors should monitor execution in scaling operations to meet the projected market growth and the company's ability to maintain service quality as volume increases.

Li-Cycle recycled battery feedstock from U.S. BESS partners in 2024 that was the equivalent to more than 100 MWh, a 33% increase over the previous year

BESS plays a central role in meeting rapidly growing electricity demand, including supporting growing data center-related energy demand for artificial intelligence (AI) technologies

Li-Cycle is an important ecosystem partner for BESS through providing a safe recycling solution and recovering critical materials, enabling reduced reliance on foreign mineral supplies

TORONTO--(BUSINESS WIRE)-- Li-Cycle Holdings Corp. (NYSE: LICY) (“Li-Cycle” or the “Company”), a leading global lithium-ion battery resource recovery company, is pleased to partner with major battery energy storage system (“BESS”) companies across the U.S. to provide expert lithium-ion battery recycling services.

The Company’s BESS partners are an important part of Li-Cycle’s recycling feedstock mix. In 2024, Li-Cycle recycled the equivalent of more than 100 MWh of energy from its BESS partners, which was a 33% increase over the previous year. During Q4 2024, BESS accounted for approximately 27% of the Company’s recycling feedstock in the U.S.

The U.S. energy storage market is expected to almost double from 34.4 GWh in 2024 to approximately 67.5 GWh in 2028, largely driven by grid-scale applications¹. By recycling BESS and recovering critical materials in the U.S., Li-Cycle supports domestic energy independence and the onshoring of the energy supply chain.

“Li-Cycle’s BESS partnerships demonstrate how we can support the electrical grid by providing a valuable service,” said Ajay Kochhar, Li-Cycle President and CEO. “Data centers supporting rapidly growing AI applications have become a leading driver of electricity demand in the U.S.². BESS is well suited to address the swiftly growing energy needs of AI technologies through on-site energy solutions and supporting grid stability. Li-Cycle is an important BESS ecosystem partner as we provide a safe recycling solution and also recover critical materials already in use at commercial scale in the U.S., reducing reliance on foreign mineral supplies.”

Two examples below illustrate the end-to-end value offering that Li-Cycle delivers to its BESS partners:

Safely Recycling Hazardous Material for a BESS Customer

Li-Cycle received and processed battery modules from a BESS customer that were severely damaged. The modules were shipped as hazardous waste, underscoring the critical need to process the material quickly to maintain compliance and mitigate risk. All modules were received and processed safely and quickly at Li-Cycle’s Arizona Spoke, providing a strong level of service and value-add to Li-Cycle’s BESS customer.

Helping an Environmental Services Company Meet an Urgent Deadline

Li-Cycle assisted an environmental services company to receive and recycle hundreds of tonnes of modules, which was the equivalent of approximately 60 MWh, from a battery energy storage site. Through the Company’s safe and efficient operational process, Li-Cycle was able to empty and reuse crates while working against a critical timeline to avoid impending winter weather that would impact the energy storage site’s availability and working conditions. Li-Cycle met the BESS customer’s urgent schedule, enabling the timely completion of this large-scale project.

About Li-Cycle Holdings Corp.

Li-Cycle (NYSE: LICY) is a leading global lithium-ion battery resource recovery company. Established in 2016, and with major customers and partners around the world, Li-Cycle’s mission is to recover critical battery-grade materials to create a domestic closed-loop battery supply chain for a clean energy future. The Company leverages its innovative, sustainable and patent-protected Spoke & Hub Technologies™ to recycle all different types of lithium-ion batteries. At our Spokes, or pre-processing facilities, we recycle battery manufacturing scrap and end-of-life batteries to produce black mass, a powder-like substance which contains a number of valuable metals, including lithium, nickel and cobalt. At our future Hubs, or post-processing facilities, we plan to process black mass to produce critical battery-grade materials, including lithium carbonate, for the lithium-ion battery supply chain. For more information, visit https://li-cycle.com/.

Forward-Looking Statements

Certain statements contained in this press release may be considered “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the U.S. Securities Act of 1933, as amended, Section 21 of the U.S. Securities Exchange Act of 1934, as amended, and applicable Canadian securities laws. Forward-looking statements may generally be identified by the use of words such as “believe”, “may”, “will”, “continue”, “expect”, “should”, “plan”, “potential”, “future”, or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters, although not all forward-looking statements contain such identifying words. Forward-looking statements in this press release include, but are not limited to, statements that the U.S. energy storage market is expected to almost double from 34.4 GWh in 2024 to approximately 67.5 GWh in 2028; the Company’s expectations that by recycling BESS and recovering critical materials in the U.S., Li-Cycle will support domestic energy independence and the onshoring of the energy supply chain; and the Company’s plans to provide a safe recycling solution and recover critical materials already in use at commercial scale in the U.S., reducing reliance on foreign mineral supplies.

These statements are based on various assumptions, whether or not identified in this press release, including but not limited to assumptions regarding Li-Cycle’s ability to satisfy the drawdown conditions and access funding under the Company’s DOE loan facility; the timing, scope and cost of Li-Cycle’s projects, including paused projects; the processing capacity and production of Li-Cycle’s facilities; Li-Cycle’s ability to source feedstock and manage supply chain risk; Li-Cycle’s ability to increase recycling capacity and efficiency; Li-Cycle’s ability to obtain financing on acceptable terms or at all; the success of Li-Cycle’s cash preservation plan; the outcome of the go-forward strategy of Li-Cycle’s Rochester Hub; and Li-Cycle’s ability to retain and hire key personnel and maintain relationships with customers, suppliers and other business partners. There can be no assurance that such estimates or assumptions will prove to be correct and, as a result, actual results or events may differ materially from expectations expressed in or implied by the forward-looking statements.

These forward-looking statements are provided for the purpose of assisting readers in understanding certain key elements of Li-Cycle’s current objectives, goals, targets, strategic priorities, expectations and plans, and in obtaining a better understanding of Li-Cycle’s business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes and is not intended to serve as, and must not be relied on, by any investor as a guarantee, an assurance, a prediction or a definitive statement of fact or probability.

Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Li-Cycle and are not guarantees of future performance. Li-Cycle believes that these risks and uncertainties include, but are not limited to, the following: Li-Cycle’s inability to fund the anticipated costs of, and realize the anticipated benefits from, its Spoke optimization plan; Li-Cycle’s inability to satisfy the drawdown conditions and access funding under the DOE Loan Facility; Li-Cycle’s inability to develop the Rochester Hub as anticipated or at all, and other future projects including its Spoke network expansion projects in a timely manner or on budget or that those projects will not meet expectations with respect to their productivity or the specifications of their end products; risk and uncertainties related to Li-Cycle’s ability to continue as a going concern; Li-Cycle’s insurance may not cover all liabilities and damages; Li-Cycle’s reliance on a limited number of commercial partners to generate revenue; Li-Cycle’s failure to effectively remediate the material weaknesses in its internal control over financial reporting that it has identified or its failure to develop and maintain a proper and effective internal control over financial reporting; and risks of litigation or regulatory proceedings that could materially and adversely impact Li-Cycle’s financial results. These and other risks and uncertainties related to Li-Cycle’s business are described in greater detail in the sections titled “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation—Key Factors Affecting Li-Cycle’s Performance” in its Annual Report on Form 10-K and the sections titled “Part II. Other Information—Item 1A. Risk Factors” and “Part I. Financial Information—Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation—Key Factors Affecting Li-Cycle’s Performance” in its Quarterly Reports on Form 10-Q, in each case filed with the SEC and the Ontario Securities Commission in Canada. Because of these risks, uncertainties and assumptions, readers should not place undue reliance on these forward-looking statements. Actual results could differ materially from those contained in any forward-looking statement.

Li-Cycle assumes no obligation to update or revise any forward-looking statements, except as required by applicable laws. These forward-looking statements should not be relied upon as representing Li-Cycle’s assessments as of any date subsequent to the date of this press release.

^{________________________________
1} Source: Wood Mackenzie.
² Source: Grid Strategies.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250210188028/en/

Investor Relations & Media

Louie Diaz

Sheldon D'souza

Investor Relations: investors@li-cycle.com

Media: media@li-cycle.com

Source: Li-Cycle Holdings Corp.

FAQ

How much BESS material did Li-Cycle (LICY) recycle in 2024?

Li-Cycle recycled over 100 MWh equivalent of battery feedstock from U.S. BESS partners in 2024, representing a 33% increase from the previous year.

What percentage of Li-Cycle's (LICY) U.S. recycling feedstock came from BESS in Q4 2024?

BESS materials accounted for approximately 27% of Li-Cycle's U.S. recycling feedstock in Q4 2024.

What is the projected growth of the U.S. energy storage market by 2028?

The U.S. energy storage market is expected to grow from 34.4 GWh in 2024 to approximately 67.5 GWh in 2028, primarily driven by grid-scale applications.

How many MWh of modules did Li-Cycle (LICY) recycle for the environmental services company project?

Li-Cycle recycled hundreds of tonnes of modules, equivalent to approximately 60 MWh, from a battery energy storage site for an environmental services company.