Growing demand for EVs in Israel spurs new $10 million battery recycling facility in the region

A towering stack of electric vehicle batteries dominates the courtyard of Erlos Produktion und Montagen GmbH recycling plant in a remote corner of eastern Germany. Soon, its counterpart will rise in Israel, spearheaded by a partnership led by veteran car importer Colmobil. The Erlos facility is one of the few in Germany dedicated to recycling electric vehicle batteries.

Image Source: Erlos plant in Germany (Peter Fenes)

The upcoming facility

Set to open by the end of next year, the $10 million facility is under construction in Neot Hovav, where it will handle batteries from wrecked cars, end-of-life units, and defective stock. This milestone marks a major achievement for Erlos and its equipment supplier, Peter Hessler, as they extend their expertise beyond Germany's borders.

Colmobil is an Israel-based vehicle importer and marketer known for selling new and used cars, trucks, buses, and commercial vehicles. The company will join forces with electronic waste recycler Dash and the Silvers brothers, owners of EMS Metals, plan to establish Israel's first vehicle battery recycling plant under the name Mili Recycling for Israel.  Colmobil holds an 83 per cent stake in the new venture.

Aluminum plays a crucial role in electric vehicles, making it an ideal choice for prismatic battery casings, foils, and battery housing. Among these applications, battery casing holds the largest share of aluminium usage in global EV manufacturing.

Israel's EV scenario

In Israel, electric vehicles are on the rise, with one in four new cars now fully electric—a trend that continues to grow. This increasing adoption is one of the key reasons behind the need for a local battery recycling facility, explains Kaufman. While Israel has not yet enacted legislation similar to the European directive on battery recycling, it is a signatory to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal.

This agreement mandates that if a country has the necessary recycling infrastructure, it must process waste domestically before exporting it for recycling abroad, as is currently the case. Israel is a relatively small market, but its rapid transition to electric vehicles underscores the demand for such a facility. The recycling plant under construction will be able to process 20,000 tonnes of batteries annually.

Under proper surveillance and care

The batteries, once received, are kept under proper surveillance and care. Some rest in wooden crates, others in metal cages, while smaller hybrid batteries are sorted into plastic containers. Surrounding them, like the remnants of a dismantled fleet, lie car parts of all kinds—bumpers, tyres, sheet metal panels, and airbags encased in aluminium boxes—all awaiting their turn in the recycling process.

Used batteries lose their luster. Some arrive at this sprawling industrial site near Zwickau, in eastern Germany, after reaching the end of their lifespan, unable to hold a charge. Others are here due to production defects.

Battery production –a resource-intensive process

Roni Kaufman, EVP of Business Development at Colmobil, recently visited the Erlos recycling plant to gain insights from their experience with the URT-supplied recycling line. He noted that battery lifespan, once estimated at around seven years, has proven to be longer in some cases. "There are batteries that have maintained high efficiency for ten years or more," added Roni Kaufman.

Regardless of lifespan, battery production is resource-intensive, relying on rare earth metals extracted through complex and often problematic supply chains. Cobalt from the Congo, lithium from South America, manganese, and other critical minerals require immense effort to mine and refine. The industry grapples with difficult extraction conditions, limited access to these metals, severe environmental pollution, and human exploitation. Illegal mining, particularly in Africa, has surged in response to the global demand for these valuable resources.

Importance of recycling these rare earth elements

Recycling these rare elements from batteries is not just essential—it's also becoming commercially viable, especially with government regulations supporting the effort. Phillip Steinbock, ERLOS's operations manager for battery recycling and head of the Zwickau facility, refers to the process as "urban mining."

"It's important to understand that all the fuel cells for these batteries are produced in China or South Korea using highly specialised technology," he said. The reality is that China holds a decades-long lead over the European and American industries, positioning itself at the forefront of the battery supply chain.

A recent report by the International Energy Agency revealed that 90 per cent of fuel cells for batteries are manufactured in China. Even companies that claim to produce their own batteries, such as Tesla, rely on Chinese-made cells—for example, sources from BYD—and assemble them using proprietary methods.

These cells are composed of rare earth metals in undisclosed proportions, combined with an electrolyte to generate electrical current. The entire structure is then encased in a mix of iron, plastic, and aluminium or specialised alloys, forming the core of modern battery technology.

Currently, there are no standardised protocols for the process. At a nearby workstation, a burly man—easily weighing nearly 200 kilos—leans on a crowbar, painstakingly prying apart the adhesive that binds the fuel cells to their aluminium casing. Once freed, the exposed batteries are placed onto small carts, reminiscent of those used in mines. These carts are then hoisted high, nearly reaching the ceiling of the facility, ready for the next stage of recycling.

The process of recycling

"So far," Steinbock reveals, "there has only been one time when a battery that was not completely discharged was accidentally put in. We saw a spark for a second, but it didn't ignite because there wasn't enough oxygen, the nitrogen was enough to prevent a fire. Production was stopped, but there was no damage, just a lot of smoke."

At the top of the elevator, the carts tip forward like bins on garbage collection day, dumping the batteries into the shredding chamber. From the adjacent control room, we get a clear view of the process: a row of columns made from high-strength steel—similar to what's used in milling—lined with sharp, grinding teeth. These powerful blades are primed to tear the cells apart, extract the electrolyte, and break everything down into smaller fragments. What follows is a series of chemical processes, both simple and complex, designed to separate the materials into their base elements for reuse.

The electrolyte poses the greatest risk, primarily due to its flammability. To mitigate this, shredding inside the recycling chamber takes place in a controlled environment with reduced oxygen levels—just 5 per cent, compared to the 20-21 per cent found in the atmosphere. The chamber is also completely sealed, a feature Hessler takes great pride in. It's here that his experience with refrigerator recycling proves invaluable, ensuring a secure and controlled process that minimises the risk of ignition.

The internal combustion engine is deeply woven into Germany's economic history—many would argue it played a pivotal role in the country's success. The cities of Zwickau and Chemnitz, once industrial powerhouses, became early hubs of German automobile manufacturing, thanks to their proximity to coal and steel resources.

Germany's EV history

Meanwhile, Germany has taken a different approach. In 2023, the government abruptly ended subsidies for electric cars, which had previously offered buyers incentives of up to €5,000. With funding frozen due to budget constraints, many consumers have adopted a wait-and-see attitude, leading to a sharp decline in EV sales.

In 2024, just 380,000 fully electric vehicles were sold in Germany—only one in five new cars, marking a nearly 30 per cent drop from the previous year. In contrast, hybrid vehicle sales surged by 13 per cent, reaching 950,000 units. A lack of charging infrastructure exacerbates the problem. Charging stations remain scarce in cities and along highways, and Germany's vast expressway network, with its long stretches between urban centres, discourages many from making the switch to fully electric cars.