The first generation of electric vehicles sold in Southeast Asia is approaching end of life. Batteries that powered early Nissan Leafs, Mitsubishi i-MiEVs and Chinese-built e-scooters are now being retired in volumes that strain existing waste management channels. A small but growing number of mid-market recyclers in Thailand, Indonesia and Vietnam have begun to treat these batteries not as hazardous waste but as a source of valuable metals.
This article examines how these recyclers operate, what they recover, who buys their output and what risks remain for investors and operators considering entry.
The Scale of the Opportunity
Southeast Asia's EV fleet remains small relative to China or Europe, but the region's rapid adoption of two- and three-wheeled electric vehicles, combined with early passenger car imports, has created a measurable waste stream. According to estimates from the International Energy Agency, the region could generate 50,000 to 80,000 tonnes of end-of-life lithium-ion batteries annually by 2028, up from roughly 5,000 tonnes in 2023. Most of this volume will come from Thailand, Indonesia and Vietnam, where EV sales have grown fastest.
Mid-market recyclers are positioned to capture this flow before it reaches informal scrap yards or landfill. Unlike large multinational recyclers such as Umicore or Li-Cycle, which require high-volume feedstocks and capital-intensive hydrometallurgical plants, mid-market operators in Southeast Asia use simpler mechanical and pyrometallurgical processes that can be scaled incrementally.
How Mid-Market Recyclers Operate
The typical mid-market recycler in the region begins with manual disassembly. Batteries are discharged, opened and separated into modules, cells and casing materials. Aluminium and copper casings are sold to local metal traders. The remaining black mass — a mixture of cathode and anode materials — is processed further.
Two main recovery routes are used:
Pyrometallurgical processing. The black mass is smelted in a furnace to recover cobalt, nickel and copper as a metal alloy. Lithium is lost to slag and not recovered. This method is energy-intensive but requires less chemical handling and can tolerate mixed battery chemistries. Several Thai recyclers have adopted this approach using modified rotary kilns originally designed for e-waste.
Hydrometallurgical processing. The black mass is leached with acid to dissolve metals, which are then selectively precipitated or extracted using solvent extraction. This route recovers lithium as well as cobalt and nickel, but requires careful management of wastewater and chemical reagents. A handful of Vietnamese operators have built small hydrometallurgical lines, often with technical assistance from Chinese equipment suppliers.
Neither route is capital-efficient at small scale. A pyrometallurgical line capable of processing 1,000 tonnes of black mass per year costs roughly $2m to $4m to build, according to equipment quotes reviewed by The FY Times. Hydrometallurgical lines of similar capacity cost $3m to $6m. These figures are significantly lower than the $50m-plus required for a large-scale plant, but still represent meaningful capital commitments for mid-market firms.
Who Is Buying the Output
Recovered metals from Southeast Asian recyclers flow into two main channels.
Domestic battery material supply chains. Thailand and Indonesia are building domestic battery cell production capacity, with factories operated by companies such as宁德时代 (CATL) and LG Energy Solution planning to source precursor materials locally. Recycled cobalt and nickel can be sold to precursor manufacturers, though purity requirements are stringent. Most mid-market recyclers achieve 95-98% purity for cobalt and nickel, which is sufficient for some precursor grades but not for direct cathode active material production.
Export to Chinese and South Korean refiners. Lower-purity metal concentrates are exported to China and South Korea, where large refiners further process them into battery-grade materials. This channel is price-sensitive and subject to logistics costs, but provides a reliable off-take route for recyclers that cannot meet domestic purity specifications.
Commercial Impact
For a mid-market recycler processing 1,000 tonnes of black mass per year, revenue potential depends on metal prices and recovery rates. At current cobalt prices of roughly $30/kg and nickel at $18/kg, a pyrometallurgical operator recovering 90% of cobalt and 85% of nickel could generate annual revenue of $4m to $6m from metal sales alone, before accounting for copper and aluminium. Operating costs, including energy, labour and transport, typically run at 60-70% of revenue, leaving gross margins of 30-40%.
These margins are attractive compared to traditional scrap metal recycling, but they are highly sensitive to commodity price fluctuations. A 20% drop in cobalt prices would reduce revenue by roughly $1m for the same operator, compressing margins to 15-20%.
Why It Matters
Southeast Asia's battery recycling sector is emerging at a time when global battery material supply chains are under pressure to diversify away from Chinese-dominated refining. Mid-market recyclers in the region offer a potential source of secondary cobalt, nickel and lithium that is geographically closer to new battery factories in Thailand and Indonesia than African or South American mines. If these recyclers can scale reliably, they could reduce the region's dependence on imported virgin materials and create a local circular economy for battery metals.
For investors, the sector represents a way to gain exposure to critical mineral supply without the geological risk of mining. For operators, the window of opportunity is open but narrowing: as battery chemistries shift toward lithium iron phosphate (LFP), which contains no cobalt or nickel, the economic case for recycling older batteries may weaken.
Risks and Unknowns
Several factors could undermine the commercial viability of mid-market battery recycling in Southeast Asia.
Regulatory uncertainty. No Southeast Asian country has enacted comprehensive battery waste regulations that mandate recycling or set collection targets. Thailand's draft Battery Act has been under review since 2022. Indonesia's Ministry of Environment has issued guidelines but no binding rules. Without regulatory pressure, battery owners may choose cheaper disposal routes, reducing feedstock availability.
Technology risk. The shift toward LFP batteries, which contain no cobalt or nickel, reduces the value of recycled black mass. Pyrometallurgical recyclers that rely on cobalt and nickel recovery will face lower revenues per tonne. Hydrometallurgical recyclers can recover lithium from LFP, but lithium prices have fallen sharply from 2022 highs, compressing margins.
Competition from informal sector. In many Southeast Asian markets, informal scrap collectors already handle end-of-life batteries, often extracting only copper and aluminium and discarding the black mass. Formal recyclers must compete for feedstock with these informal operators, who have lower overheads and no environmental compliance costs.
Logistics and collection. Batteries are heavy, hazardous and distributed across many small owners. Collection costs can exceed $500 per tonne for batteries located outside major urban centres, eroding margins for recyclers that cannot secure concentrated feedstock sources.
FY Outlook
Over the next three to five years, the most likely scenario is gradual consolidation. A small number of mid-market recyclers in Thailand and Indonesia will achieve consistent production and secure off-take agreements with domestic battery material producers. These operators will benefit from first-mover advantages in building collection networks and process know-how.
Less established recyclers, particularly those relying on pyrometallurgical processes without lithium recovery, will face margin pressure as LFP batteries become more common. Some may pivot to processing other lithium-ion waste streams, such as consumer electronics batteries, which have different chemistry profiles.
Regulatory developments will be a key catalyst. If Thailand or Indonesia enacts binding battery recycling mandates, feedstock availability will improve and margins may widen. If regulation remains absent, the sector will remain dependent on metal prices and voluntary collection schemes.
Conclusion
Mid-market battery recyclers in Southeast Asia are capturing real commercial value from end-of-life EV batteries, but the economics are fragile. The sector offers a genuine opportunity for investors and operators who can manage technology risk, secure feedstock and navigate regulatory uncertainty. Those who enter with realistic expectations about margins and timelines are better positioned than those expecting rapid, regulation-driven growth.
The secondary battery lifecycle in Southeast Asia is not yet a mature industry. It is an emerging sector where early movers can build defensible positions, but only if they treat the business as a materials processing operation with commodity exposure, not as a clean-tech growth story.
