The role of OEMs in closing the battery supply chain loop

How Manufacturers Can Improve Battery Circularity Through Better Design and Partnerships

Why Battery Circularity Is Becoming a Strategic Priority

As the battery industry undergoes rapid transformation, the pressure is mounting on original equipment manufacturers (OEMs) to address the environmental footprint of their products. From electric vehicles to stationary storage, the demand for batteries is growing — and so is the urgency to reduce reliance on virgin raw materials. In this context, battery circularity is no longer a secondary concern; it is emerging as a key pillar of long-term competitiveness, regulatory compliance, and supply chain resilience.

At the center of this transition are battery OEMs, whose design and sourcing decisions have ripple effects throughout the value chain. By embracing circularity — through smarter design and strategic collaboration — OEMs can play a defining role in closing the loop on battery materials and reducing environmental impact.

Smarter Design: The First Step to Circularity

Improving battery circularity starts at the design phase. Traditional battery packs are often built with performance and cost in mind, but not with disassembly or recyclability as priorities. This approach makes end-of-life handling costly and inefficient, requiring manual labor or energy-intensive shredding methods.

The new generation of battery OEMs is rethinking this approach. Designing batteries for disassembly means simplifying structures, reducing the use of adhesives, and opting for mechanical fasteners that facilitate separation. Such design strategies make it possible to recover critical materials more efficiently while also enabling reuse or second-life applications.

With the upcoming EU Battery Regulation requiring detailed reporting on carbon footprint, material content, and recyclability, sustainable design is becoming a regulatory obligation — not just a best practice. By integrating recyclability into their development processes, OEMs can reduce both the environmental impact and the long-term cost of compliance.

Collaboration as a Competitive Advantage

While design is fundamental, no battery OEM can achieve full circularity alone. Closing the loop requires close collaboration with specialized partners across the battery lifecycle — from collection and disassembly to recycling and reintegration of materials into new cells.

These partnerships are especially crucial in light of the increasing complexity of battery chemistries and the growing volume of end-of-life batteries entering the market. By working with certified recyclers and automation providers, OEMs gain access to the technologies and expertise needed to safely dismantle batteries and recover valuable elements like lithium, cobalt, and nickel.

Moreover, collaboration enables better data exchange, which is critical for traceability. As the EU moves towards mandatory digital battery passports, the ability to track each battery through its lifecycle will become indispensable. Strategic partnerships will be essential for managing these flows of information and ensuring compliance across the entire supply chain.

Regulations Driving Change

The 2025 EU Battery Regulation marks a turning point for the industry. It introduces extended producer responsibility, mandatory recycling targets, and carbon footprint declarations — all of which place the battery OEM at the center of regulatory scrutiny. These new requirements mean that OEMs must now take responsibility not only for the performance of their products, but also for their environmental impact at end of life.

Rather than seeing this shift as a burden, leading manufacturers are embracing it as an opportunity. By investing early in circularity, OEMs can reduce their exposure to raw material volatility, increase operational efficiency, and reinforce their environmental credentials in the eyes of customers, investors, and regulators alike.

Taking Action Today

The transition to a closed-loop battery economy will not happen overnight. It requires proactive steps, including revisiting product design standards, integrating digital traceability tools, and securing long-term recycling partnerships. For battery OEMs, the time to act is now.

Those who embrace battery circularity today will be better positioned to navigate tomorrow’s challenges — from tightening regulations to shifting market expectations. More importantly, they will help shape a battery industry that is not only high-performing and innovative, but also responsible and future-proof.

Circu Li-ion partners with leading battery OEMs to enable scalable, sustainable battery disassembly and material recovery. Our technologies and services support manufacturers in making circularity a reality. Contact us to learn how we can help close your battery supply chain loop — efficiently, safely, and at scale.