Colorado Law Shifts EV Battery Recycling Costs to Manufacturers

Electric vehicle battery recycling costs often exceed battery values, challenging salvage yards nationwide.

Colorado’s new law mandates that manufacturers assume responsibility for recycling EV batteries, potentially addressing a structural economic imbalance in the industry. This legislation could reshape how the sector manages end-of-life batteries and mineral recovery.

Recycling battery minerals, the better option, reduces the climate footprint of new vehicle production and eases U.S. reliance on China for those critical minerals. In the best-case scenario, it also makes money for everyone involved.

But in many cases, the math for EV battery recycling is not penciling out. That’s leaving salvage yards stuck with old batteries nobody wants, not even recyclers.

Currently, salvage yards face steep costs: Tesla battery recyclers may charge up to $1,800 to accept a single battery, while the replacement cost might be $1,200 to $2,000.  Colorado’s law, passed this summer, requires manufacturers to cover recycling expenses and ensure mineral recovery, a move supported by environmental groups, recyclers, and automakers alike.

The legislation is designed as a starting point, with hopes other states will adopt similar producer responsibility frameworks as EV adoption accelerates.

Montana businesses might find value in monitoring how Colorado’s approach influences regional recycling networks and manufacturer obligations in the coming years.

EV battery recycling has an economics problem. Colorado has a solution
By Camila Domonoske, NPR