The Power Shortage Wave Amid the AI Boom: How Grid Equipment Is Becoming a New Strategic Asset
2026-07-14
The decisive factor in global artificial intelligence competitions has officially shifted from chip delivery cycles to power and grid infrastructure. As the power demand of hyperscale data centers surges exponentially, electricity has not only become the core of hundreds of billions of dollars in capital expenditures by tech giants such as Microsoft and Amazon, but also triggered strategic layouts at the U.S. national security level due to the severe shortages and geopolitical risks surrounding key equipment like transformers. In the AI era, computing power is equivalent to national strength, and the sole prerequisite for guaranteeing computing power is robust and uninterrupted power grid support. This computing power-driven energy scramble has also reshaped the strategic status of the global power supply chain.
Electric power has become the top capital expenditure
For a long time, the biggest challenge facing the technology industry has been the lead time for hardware and chips. However, entering 2026, the development bottleneck has shifted from servers to substations. Fueled by the rapid expansion of the large-scale data center industry, electricity has become the primary growth constraint between 2023 and 2026. According to forecasts by the International Energy Agency (IEA) and Data Center Dynamics, global data centers consumed approximately 460 terawatt-hours (TWh) of electricity in 2022, with the figure projected to peak above 1050 TWh by 2026. Artificial intelligence and high-performance workloads are growing far faster than power grids can accommodate. The unbreakable rule governing modern data center development is simple: no power, no project.
Meanwhile, the latest report released by JLL in 2026 clearly points out that the power density required by AI training facilities is ten times that of traditional data centers. It is estimated that by 2030, AI workloads will account for more than half of the total global data center capacity, doubling compared with 2025. Artificial intelligence has risen to become a core national strategy, prompting countries worldwide to compete in investing in sovereign infrastructure to strengthen domestic capabilities, with an estimated capital investment of up to 8 billion US dollars driven by 2030. To power these energy-intensive facilities, major US hyperscale data center operators including Microsoft, Alphabet, Amazon, Meta and Oracle plan to invest nearly 700 billion US dollars in capital expenditure for artificial intelligence from 2025 to 2026, the vast majority of which is aimed at ensuring the stability of infrastructure and power supply networks.
Transformer Shortages and Grid Interconnection Bottlenecks
The essence of this crisis lies in the fact that infrastructure development fails to keep pace with technological iteration. A report by venture capital firm Bessemer Venture Partners lays bare the harsh reality: the physical construction of a data center can be completed in 12 to 18 months, yet connecting it to the existing power grid takes five to seven years. This massive timeline gap has forced more than a quarter of new data center projects to be delayed due to power supply and permitting issues. Reports released by multiple regional grid operators across the United States in early 2026 all warn that the queue for grid interconnection of large power loads is growing exponentially. In Texas and the U.S. Midwest alone, the capacity of ultra-large data centers waiting for grid connection is projected to soar to 173 gigawatts by 2030, far exceeding the current grid load limit.
However, even with sufficient power generation, the lack of transformers—devices that convert high-voltage electricity into voltages usable by data centers—can bring all computing power progress to an immediate halt. Competition for transformers has reached a fever pitch, and lengthy delivery lead times are dictating the progress of power engineering and the development of AI infrastructure. According to a report by Wood Mackenzie, from 2019 to 2025, U.S. demand for Generator Step-Up (GSU) transformers surged by 274%, while demand for power transformers rose by 116%, with supply gaps standing at 6% and 30% respectively. Large power transformers that once required only around 50 weeks for delivery now have an average lead time of over 120 weeks, with the waiting period for some high-spec equipment extending to several years. The market imbalance has driven a sharp rise in transformer delivery times and prices, prompting U.S. power transformer buyers to scramble for imported products and factory production slots, fearing that tens of billions of dollars in AI infrastructure deployment will stall at the final stage.
Recognizing the significance of data center construction for national security and U.S. competitiveness in the global artificial intelligence race, the U.S. government took action in April 2026. U.S. President Donald Trump invoked Section 303 of the Defense Production Act to officially designate large-scale power grid infrastructure as a national defense necessity, and authorized emergency federal funding to expand domestic supply of key components in this supply chain.
Power grid upgrading faces challenges in Chinese supply chain and cybersecurity.
Due to the United States’ lack of domestic manufacturing capacity for ultra-high-voltage transformers, while 70% to 90% of the global production capacity of key power grid components is highly concentrated in China, amid the dual pressures of global geopolitical competition and tariff barriers, major U.S. tech companies have actively relocated server production lines out of Asia yet face an extremely fragile supply chain situation for core power transmission equipment.
To meet the massive power demand driven by AI data centers, the United States is comprehensively advancing power grid expansion and modernization projects. Supported by federal and state government initiatives, U.S. utility companies are actively deploying Advanced Metering Infrastructure (AMI), AI analytics systems, Battery Energy Storage Systems (BESS), and Distributed Energy Resource Management Systems (DERMS). These digital technologies transform traditional one-way power transmission systems into intelligent, real-time responsive networks, enabling more efficient resource management and laying a rapid expandable power foundation for data centers required for advanced AI applications.
However, while grid digitalization boosts efficiency, it also introduces new cyber risks. Unencrypted communication protocols and persistent remote access functions in grid equipment can easily become vulnerabilities for hackers to modify settings, disrupt services, or inject erroneous data. Compounding these risks, 70% to 90% of critical U.S. power grid equipment is manufactured by Chinese producers, and the U.S. lacks manufacturing capabilities for key assets such as ultra-high-voltage transformers. This leaves the U.S. confronting severe supply chain and national security risks while advancing grid digital transformation. To mitigate such hazards, the U.S. federal government has recently enacted legislation establishing the **Foreign Entity of Concern (FEOC) restrictions, which mandate that projects must meet a minimum threshold of non-FEOC component usage to qualify for tax credits. This places utility companies in a dilemma: they must rapidly expand infrastructure to accommodate the surging power demand of data centers, while striving to diversify supply chains and comply with stringent cybersecurity and regulatory requirements amid a shortage of viable alternative components.
To address the soaring demand for transformers, major U.S. power grid equipment manufacturers are ramping up production capacity. According to forecasts by Hitachi Energy, U.S. demand for power grid infrastructure will continue to grow for at least the next decade. Hitachi Energy has announced investments of over 1 billion U.S. dollars to build a new factory in South Boston, scheduled to commence operations in 2028, and an additional 106 million U.S. dollars to construct a transformer plant in Alamo, Tennessee. Siemens also increased its investment in its North Carolina manufacturing facility from 150 million U.S. dollars to 421 million U.S. dollars in February 2026, including a new transformer plant in Charlotte set to start production within the year.
Unlike standardized electronic products, large high-voltage transformers typically require customized design with long manufacturing lead times, and their production is highly dependent on specialized materials and professional manufacturing expertise, making rapid capacity expansion extremely challenging. Furthermore, as countries worldwide simultaneously promote the development of AI data centers, electric vehicles, renewable energy, power grid upgrades, and industrial electrification, a global competition for power grid equipment has emerged, and power grid development has become a key component of national competitiveness.
According to the 2026 latest report released by McKinsey & Company, global investments of up to 7 trillion U.S. dollars will be required for data center-related infrastructure by 2030 to meet soaring computing power demand, with a large proportion directly allocated to energy infrastructure such as power generation and cooling systems. Infrastructure funds and private equity firms have also begun direct investments in power plants and large-scale acquisitions of renewable energy projects. In the United States, an increasing number of hyperscale cloud providers are considering building self-owned power generation and energy storage systems to secure stable power supply. Tech giants including Microsoft, Amazon, Meta, and Google have invested heavily in securing capacity from conventional nuclear power plants. For instance, Microsoft signed a long-term agreement with Constellation Energy to restart unit operations at the Three Mile Island Nuclear Generating Station and comprehensively advance the commercialization of Small Modular Reactors (SMRs). Meta signed nuclear power agreements totaling over 6 gigawatts (GW) in early 2026, while Amazon has invested in X-energy and targeted a future SMR deployment capacity of 5 GW. As of early 2026, major U.S. tech companies have accumulated tens of billions of U.S. dollars in nuclear power procurement orders, elevating power procurement from a basic facility management task to a top-tier strategic decision at the corporate board level.
The Next Arms Race in Computing Power: Grid Warfare
With ultra-large data centers successively adopting self-developed processors, customized chips are expected to capture a 15% market share by 2030. Emerging technologies such as neuromorphic computing are also poised to reduce infrastructure demands and improve energy efficiency. The sole prerequisite for guaranteeing computing power is robust and uninterrupted power grid support.
Over the past two decades, the core of global technological competition has centered on the chip war. In the next decade, the focus of competition may shift back to energy flow. Artificial intelligence will no longer be merely a software industry, but a capital-intensive industry highly reliant on physical infrastructure. This means power grids, transformers, power distribution equipment, energy storage systems and power management facilities will no longer be categorized as traditional industrial assets, but will evolve into new-generation strategic technological assets. Multinational corporations and tech giants must classify heavy power equipment for infrastructure construction as top-tier strategic materials and even directly engage in upstream industrial layout to secure a stable supply chain.
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Hundreds of billions of US dollars are poured into overseas markets. Why is AI computing power speeding up its exodus from the United States
2026-07-13
As AI faces power shortages and public backlash within the United States, the next destinations for computing infrastructure are seeing accelerated migration southward and northward. Anthropic is betting 15 billion US dollars on Australia, while Meta is investing 10 billion US dollars to expand into Canada. Will this massive infrastructure migration involving tens of billions of dollars reshape the global computing power landscape?
Amid mounting difficulties, AI infrastructure is shifting its footprint away from the United States.
After the Digital Gateway data center project in Virginia, once billed as the world’s largest, was scrapped following years of lawsuits and protests from local residents, a growing number of tech giants are turning their sights to overseas markets.
As recently revealed by the Australian Financial Review (AFR), leading AI firm Anthropic is looking to secure a minimum of 1.4 gigawatts of data center computing power in Australia with a massive $15 billion land and facility investment, aiming to bring 1 gigawatt of capacity online by the end of next year.
The scale of this investment is staggering. After all, the total installed capacity of currently operational data centers in Australia is approximately 1.4 gigawatts.
If Anthropic’s investment is ultimately implemented, the installed capacity from its single procurement will be roughly equivalent to Australia’s total data center installed capacity.
Not far behind, Meta recently announced a roughly $10 billion investment to build a data center in Alberta, Canada, with an installed capacity of 1 gigawatt, equal to the power consumption of 750,000 households.
Once completed, this data center will become Meta’s largest overseas data center, supported by an additional investment of approximately 60 million Canadian dollars in local infrastructure including roads and water utilities.
Beyond vast, resource-rich countries like Canada and Australia, the Middle East, Africa and Europe have also become hotspots for heavy computing investment by major U.S. AI companies.
The successive multi-billion-dollar overseas infrastructure layouts by tech giants send a clear signal: the marginal growth of AI infrastructure is spilling beyond domestic borders, and the computing infrastructure competition among large model companies has officially gone global.
This is no ordinary data center construction plan, but a high-stakes bet on the locations for the training, management, operation and commercialization of next-generation cutting-edge artificial intelligence.
01
Escaping the Domestic Bottlenecks of the United States
Behind the overseas expansion of tech giants lies the increasingly severe practical bottlenecks in the construction of data centers within the United States.
The power shortage constitutes the primary bottleneck. With the vigorous development of data center construction, the power demand in the United States has grown explosively. However, the growth of U.S. power demand has remained almost stagnant for more than a decade, with an annual growth rate of less than 1%.
In its latest report released on July 8, Bank of America stated that the United States may face a power shortage of 100 gigawatts between 2026 and 2030, driven by the booming production and surging demand for chips as well as the inability of U.S. utility companies to meet current needs.
Bank of America analysts predict that the demand for power capacity will reach 230 gigawatts or more from 2026 to 2030. Nevertheless, the bank estimates that the power supply from utility companies will only amount to 93 gigawatts.
Data from the Electric Power Research Institute also shows that in Northern Virginia, a global hub for data centers, data centers already consume approximately 25% of the United States' total electricity, and this proportion is projected to soar to 57% by 2030.
The expansion of onshore data centers in the United States has hit a snag, dealt a crippling blow by the NIMBY effect.
Soaring electricity bills driven by AI are turning data centers into the "least desirable neighbors".
A recent U.S. poll indicates that 70 percent of Americans oppose the construction of AI data centers near their residences, with 48 percent strongly opposed and merely 7 percent in favor of building such facilities in their own neighborhoods.
According to the latest figures from AI research firm Data Center Observatory, the number of active opposition groups has more than doubled in the first three months of this year, surging from 396 at the end of 2025 to 833 across 49 U.S. states.
These community groups have successfully blocked or postponed no fewer than 75 relevant projects with a total value of approximately 130 billion US dollars (equivalent to around 880 billion Chinese yuan).
More importantly, the grassroots wave of opposition has rapidly evolved into legislative games at the regulatory level.
Virginia has passed the nation's first electricity consumption tax for data centers, and New York State has imposed a one-year moratorium on approvals. In just the first six weeks of 2026, more than 30 states across the United States have proposed over 300 relevant bills.
Tech giants are more acutely aware than ever that building a diversified computing power supply chain is crucial in the AI competition.
02
Moving South and Moving North
The overseas layouts of Anthropic and Meta reflect two major directions of the migration of U.S. data center infrastructure: moving south and moving north.
As generative AI training and inference workloads become increasingly tolerant to latency and gain greater flexibility in site selection, Australia, with its unique advantages, is emerging as a new hub for computing power.
Geographically located between the United States, Asia and the Pacific region, Australia has the potential to become a hub for computing power centers in the Asia-Pacific region.
According to the 2025 annual report released by Knight Frank, Australia ranks second worldwide (only behind the United States) in the global ranking of data center investment destinations.
Anthropic’s consideration of expanding its presence in Australia in the Southern Hemisphere stems from the country’s abundant land resources and rich renewable energy endowments.
A computing power scale of 1.4GW is equivalent to the output of several nuclear power units. Australia’s relatively stable energy supply and favorable climate serve as inherent natural advantages.
More importantly, relevant policies have paved the way. In March this year, Anthropic signed a memorandum of understanding with the Australian government to cooperate on AI safety research and the national AI plan, removing obstacles for the large-scale rollout of infrastructure.
Meta also made a well-thought-out site selection in Sturgeon County, Alberta.
The province’s key advantages include low-cost natural gas, a relatively cool climate, and permission to build on-site power supplies, which allows tech companies to bypass capacity constraints of the public power grid.
According to Reuters, Meta's initial project scale in Canada is 1GW, with the capacity to expand to 1.8GW. The power supply mainly relies on natural gas power generation.
Meta will fund the construction of new power generation facilities to connect to the power grid and has signed long-term energy supply agreements with multiple energy enterprises.
This underscores Alberta's unique appeal: the province is transforming AI data centers into a new export avenue for its natural gas industry.
Alberta boasts abundant low-cost natural gas, mature energy engineering capabilities, cooling advantages brought by its cold climate, and a relatively business-friendly and tax-friendly environment.
The Prime Minister of Canada has personally endorsed the initiative, vowing to build Canada into "the world's best location for data center construction".
Regulatory certainty and accessible energy have jointly created a "lowland effect" for computing power investment in the region.
03
The Next Hotspot for Computing Power?
In fact, even before tech giants set their sights on Australia and Canada, the Middle East, Europe and even Africa have once emerged as popular destinations for computing power investment.
Leveraging abundant capital and energy advantages, the United Arab Emirates and Saudi Arabia are striving to become the "new oilfields" of global AI computing power.
Amazon announced in 2024 a new data center project worth over 10 billion US dollars in Saudi Arabia; Microsoft stated in 2025 that it would invest more than 15.2 billion US dollars in the United Arab Emirates by 2029; OpenAI also announced in 2025 that it would build the 1-gigawatt "Stargate UAE" data center in Abu Dhabi.
Nevertheless, the region is now facing severe challenges. In March 2026, three Amazon data centers in the United Arab Emirates and Bahrain suffered drone attacks amid regional conflicts, resulting in service outages.
Facilities of Google, Microsoft, NVIDIA and other companies have also been listed as potential targets. This incident may prompt US tech giants to adopt a more cautious approach to future investments in the region.
The construction of AI data centers in Europe is mainly driven by the European Union's "InvestAI" initiative, which aims to triple computing power within the next 5 to 7 years compared with the current level.
The largest single project to date is the 1 billion-euro partnership between NVIDIA and Deutsche Telekom. However, Jensen Huang has pointed out that the EU still lags behind China and the United States in AI investment, highlighting the urgency for Europe to accelerate infrastructure development.
The African market is widely regarded as the next growth hotspot, yet its current data center capacity accounts for less than 1% of the global total. Major US tech giants are entering the market through partnerships with local enterprises or independent construction, though their projects remain small in scale and fraught with implementation challenges.
Microsoft once planned to build a 100-megawatt data center in Kenya. Nevertheless, the project is currently under review due to its enormous power demand — the first phase alone would occupy approximately 3% of the country’s total installed power capacity — and unresolved government guarantee issues.
Anthropic’s massive investment in Australia marks the country’s emergence as the next computing power hub in the global AI competition.
However, great opportunities do not come without costs.
Research cited by Australia’s Climate Council indicates that if the growth of data centers is not matched by new renewable energy capacity, the average wholesale electricity price on Australia’s main grid could rise by more than 20% by 2035, with greater pressure in regions such as New South Wales and Victoria. Water resources and community acceptance will also serve as constraints.
More importantly, if Australia’s role is merely to host data centers, supply electricity, provide labor and bear environmental burdens while the majority of the value flows overseas, it may not be able to build strong influence in the AI competition.
Canada faces similar challenges.
Alberta’s core advantage lies in inexpensive natural gas, which also creates a key contradiction: the "clean computing power" touted by AI giants does not always align with the actual marginal power sources of the projects.
Meta claims its electricity consumption will be fully matched by 100% clean and renewable energy. However, Reuters has pointed out that the emission intensity of Alberta’s power grid is significantly higher than Canada’s national average.
Meanwhile, a June report from the Canadian Broadcasting Corporation (CBC) also noted that large-scale data centers exert environmental impacts on surrounding communities in terms of carbon emissions, water consumption and noise pollution, with related controversies still ongoing.
It is undeniable that in the second half of the global computing power competition, the contest is no longer about who can purchase the most advanced chips first, but about who can make computing power take root and settle down with lower institutional costs and higher system efficiency.
Anthropic and Meta are merely the starting point of this "great exodus".
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North America Lithium-ion Battery Recycling Market Size, Share & COVID-19 Impact Analysis, by Chemistry (Lithium Cobalt Oxide (LCO), Lithium Iron Phosphate (LFP), Lithium Manganese Oxide (LMO), Lithium Nickel-based Materials), by Application (Automotive, Power Tools, Others), by Recycling Process (Physical/Mechanical, Hydrometallurgy, Pyrometallurgy) and Regional Forecast, 2021-2028
2026-07-10
Key Market Insights
The North American lithium-ion battery recycling market was valued at 66.34 million US dollars in 2020. It is projected to grow from 77.85 million US dollars in 2021 to 265.8 million US dollars by 2028, registering a compound annual growth rate (CAGR) of 19.1% during 2021-2028. The regional impact of COVID-19 has been unprecedented and drastic, exerting a negative influence on market demand in this region throughout the pandemic. According to our regional analysis, the regional market saw a sluggish growth of 11.8% in 2020 when compared with the average year-on-year growth recorded between 2017 and 2019. The rise in CAGR can be attributed to the rebounding demand and expansion of the market following the end of the pandemic.
Remarkable advancements in global battery recycling have driven the expansion of lithium-ion battery recycling infrastructure. Revolutions in consumer electronics and the automotive industry have triggered a massive shift toward battery-powered devices and vehicles, making lithium-ion batteries a core component of this major development. The rising adoption of lithium-ion batteries, coupled with a growing volume of batteries reaching their end-of-life stage, has boosted the demand for lithium-ion battery recycling services.
Blockades on supply chains and distribution channels hindered market growth during the COVID-19 pandemic.
The COVID-19 pandemic exerted adverse impacts on nearly all sectors. To curb the spread of the COVID-19 virus, nationwide lockdown measures were implemented, inflicting heavy losses on a wide range of industries. Accordingly, the lithium-ion battery recycling sector also suffered substantial setbacks. As the market is highly reliant on the automotive and consumer electronics industries, disruptions to these sectors dampened investment within the market.
Disruptions to supply chains and logistics routes impeded the transportation of spent lithium-ion batteries to recycling facilities in other regions. This directly cut off the supply of second-hand batteries delivered to enterprises for recycling and severely disrupted their daily operations.
Latest Trends
The determination to commercialize technologies for recycling processes represents a critical trend.
The industry has witnessed remarkable developmental approaches adopted by various industry players to scale up recycling capacity and drive market growth. The construction of new facilities is expected to significantly boost industrialization levels and may create strong demand for new technologies over the next several years.
For instance, Li-Cycle announced a new recycling plant in Rochester, New York in December 2020. The facility boasts an annual processing capacity of 10,000 metric tons. It adopts a horizontal aluminium recycling process and hydrometallurgical techniques to achieve a recycling rate of 95%. In April 2021, Li-Cycle Corporation unveiled plans to build another lithium-ion battery recycling plant in Gilbert, Arizona. This marks the company’s second plant in the United States and its third facility globally, with a maximum annual processing capacity of 10,000 metric tons of end-of-life batteries.
Stringent regulations prohibiting the dumping of untreated waste are fuelling market expansion
All electronic waste generates large volumes of toxic waste that ends up in landfills. Lithium-ion batteries are classified as hazardous electronic waste due to the risk of fires if disposed of improperly. Additionally, illegal dumping of electronic waste in vacant lots has become a pressing environmental concern. To address this issue, governments have introduced regulatory frameworks governing chemical and electronic waste management, which is projected to drive growth in the North American lithium-ion battery recycling market in the coming years.
As an example, under Ontario Regulation 30/20, every manufacturer subject to Section 12 is required to establish and operate a battery management system during the compliance period. Mandatory promotional and educational programmes will be rolled out to raise public awareness of producers’ initiatives for battery collection, reduction, reuse, recycling and material recovery, as well as encourage public participation in such initiatives.
Driving factors
Government regulations aim to boost the adoption of cleaner power sources and unlock new potential.
The growing shift toward leveraging clean energy to supply power for diverse applications is likely to accelerate market expansion. Regional trends point to a sharp surge in lithium-ion battery installations for large-scale energy storage and electric vehicles (EVs). The anticipated rising deployment of these batteries across multiple use cases will drive the replacement of underperforming older batteries, generating waste that creates opportunities for recycling.
According to an NREL report on grid-scale battery storage, lithium-ion chemistry dominated the U.S. grid-scale battery storage market in 2020. Driven by technological innovation and expanded manufacturing capacity, the cost of lithium-ion chemistries plummeted by 70% between 2010 and 2016, with further price reductions projected (Curry 2017).
Per the U.S. Energy Information Administration, utility-scale battery storage capacity installed in the United States in 2017 reached 240 MWh with a power output of 120 megawatts, and lithium-ion batteries accounted for over 90% of this power capacity. The rising uptake of lithium-ion batteries in grid-scale energy storage and the growing demand for such batteries have fueled the growth of the regional lithium-ion battery recycling market.
Growing acceptance of electric vehicles powered by lithium-ion batteries fuels market expansion
Nations worldwide have witnessed a shift toward electric vehicles to cut carbon emissions and drive robust progress across the industry. The adoption of diverse electric vehicle models has risen steadily over the years, leaving a massive number of batteries reaching their end-of-life (EOL). According to the Energy Information Administration, the U.S. automotive market shrank by 23% in 2020, yet electric vehicle registrations declined less sharply than the overall market.
A total of 295,000 new electric vehicles were registered in 2020, approximately 78% of which were battery electric vehicles (BEVs), with their sales edging up by 2%. Government incentives were scaled back in 2020 because Tesla and General Motors had exhausted their available tax credits. Canada’s new car market dipped by 21%, while new electric vehicle registrations remained nearly flat compared to the previous year’s figure of 51,000. Ranking as the world’s eighth-largest electric vehicle market, Canada recorded over 40,000 electric vehicle sales back in 2018. As electric vehicle uptake expands, a growing volume of lithium-ion batteries will reach the end of their service life and become eligible for recycling.
Rising environmental awareness among corporations and consumers, coupled with high electric vehicle adoption rates in the United States and Canada, serves as a major driving force for this market.
Limiting factors
High capital investment and the absence of stringent policies serve as major limiting factors.
The construction of new infrastructure demands high upfront costs as well as stable supply and recycling chains, which restricts the lithium-ion battery recycling market. Furthermore, the lack of appropriate regulatory frameworks in countries that recycle battery materials may hinder industrial expansion. E-waste recycling in the United States is regulated at the state level, with only half of its states having enacted e-waste recycling legislation. This fragmented set of regulations creates obstacles for enterprises aiming to design products for improved recyclability.
Via chemical analysis
The lithium cobalt oxide (LCO) segment can maintain the largest share due to the high returns from recycling.
Based on differences in battery chemistry, the North American market is segmented into lithium cobalt oxide, lithium iron phosphate, lithium cobalt oxide, lithium nickel cobalt aluminum oxide and lithium nickel manganese cobalt oxide.
The lithium cobalt oxide segment holds the largest market share owing to the extensive application of LCO lithium-ion batteries in electronic products. The consumption and rapid obsolescence of electronic devices generate massive volumes of e-waste.
As a primary power source, lithium-ion batteries are a major contributor to such e-waste. With a cobalt content of 17%, lithium cobalt oxide batteries also deliver the most lucrative profits from recycling. Lithium iron phosphate batteries adopt phosphate as the cathode material. Featuring low resistance, they boast excellent safety and thermal stability, and are applied in scenarios demanding a long service life and prominent safety performance such as electric motorcycles. Lithium manganese oxide batteries possess superior high-temperature stability and enhanced safety compared with other lithium-ion battery chemistries, hence they are deployed in medical instruments, power tools, electric bicycles and other equipment.
Lithium nickel cobalt aluminum oxide batteries are applied in powertrain assemblies and grid energy storage systems.
Thanks to their favorable energy density and cycle life, they show promising potential for use in the automotive industry. Lithium nickel manganese cobalt oxide batteries feature either high specific energy density or high specific power rather than both simultaneously, and are used in power tools and vehicle powertrains. Different types of chemical substances are yielded during the recycling process for all the aforementioned battery chemistries, which leads to variances in recycling costs and residual economic value.
Source Analysis
The adoption of electronics will drive the growth of this market segment.
By source, the market is segmented into electronics, power tools, electric vehicles and others.
The electronics segment accounts for the largest share of recycled lithium-ion batteries. Rising consumer uptake of portable battery-powered consumer electronics has led to a growing volume of second-hand batteries, which contributes to the dominant market share held by the electronics sector.
The power tools segment covers end-of-life lithium-ion batteries from power tools recycled through a variety of processes. LMO and NMC batteries are the primary battery types within this market segment. The electric vehicles segment refers to end-of-life lithium-ion batteries retrieved from electric vehicles via multiple recycling techniques. This segment is mainly composed of LFP, LMO, NMC and NCA batteries.
Electric vehicles represent one of the fastest-growing segments, fueled by surging demand for EVs and increased investments from manufacturers specializing in EV battery recycling. The other segments encompass end-of-life lithium-ion batteries from additional industries including industrial automation, UPS/data centers and telecommunications, which are recycled using diverse recycling methods.
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Lithium is included in national defense reserves for the first time, and America's largest lithium mine is set to go into production. Will lithium prices see a dramatic shift?
2026-07-10
As a core raw material for the new energy industry, lithium is a vital mineral required for electric vehicles and grid energy storage equipment, playing a pivotal role in the global green energy transition.
Owing to its high-efficiency energy storage capability, lithium has earned the moniker "white oil", emerging as a strategic resource fiercely contested by various countries and a focal point of market attention.
The lithium battery sector has posted a strong performance since the start of this week. On July 6, Weili Lithium Core surged to a daily trading limit right after the market opening, and Times Wanheng rallied to hit the upper limit in the afternoon trading session. On July 7, the lithium ore concept bucked the overall market trend to move higher: Yahua Group locked in a one-word daily limit, while Tianhua New Energy, Rongjie Co., Ltd., Shengxin Lithium Energy and Tianqi Lithium followed suit with price increases.
Beneath the market buoyancy lies not only the strong driving force from the continuously rising demand for power batteries and energy storage batteries, but also a piece of news from the other side of the Atlantic that broke out suddenly last weekend and drew widespread attention.
On local time July 2, the Defense Logistics Agency (DLA) of the United States Department of Defense issued a tender notice, planning to procure battery-grade lithium carbonate via a five-year fixed-price contract to replenish the U.S. National Defense Stockpile. This marks the first large-scale procurement by the United States to include lithium in its national defense reserves.
According to the announcement, the maximum procurement volume of battery-grade lithium carbonate is 16,167 metric tons, with a maximum contract value of 300 million US dollars. Approximately 3,657 metric tons are expected to be purchased in the first contract year, followed by a year-on-year reduction in volume, down to around 2,839 metric tons in the fifth contract year.
The bidding documents specify that the procured product must be powdered battery-grade lithium carbonate with a purity of no less than 99.5%, to be delivered to designated DLA warehouses in New York State, Nevada State, Indiana State or Ohio State. The notice states that this procurement forms part of the U.S. National Defense Stockpile Program, intended to boost the strategic reserves of critical minerals and strengthen the security guarantee of supply chains for national defense and key industries.
According to available information, the Defense Logistics Agency (DLA) of the U.S. Department of Defense oversees the global logistics and supply chain of the U.S. military and administers more than 4 million specific line items. The National Defense Stockpile (NDS), established in 1939, is designed to secure supplies of strategic materials during national emergencies.
The inventory size of the NDS follows a cyclical pattern. Its inventory value peaked at 9.6 billion U.S. dollars in 1989. After the end of the Cold War, the stockpile value fell to 1.2 billion U.S. dollars by 2021. In recent years, the reserve scale has been on the rise again, with the U.S. beginning to procure cobalt and lithium, strategic metals vital to the new energy sector.
Adjustments to the National Defense Stockpile are closely tied to the escalation of the U.S. federal government’s policies on critical minerals. Donald Trump’s first presidential term marked the awakening and launch phase of America’s critical minerals strategy, while his second term has shifted to concrete implementation and advancement of relevant initiatives.
Since Trump returned to the White House in January 2025, his administration has centered its agenda on the America First principle. By leveraging emergency executive authority, allocating policy funding, expediting project approvals, imposing import tariffs and strengthening international cooperation, the U.S. has sought to minimize reliance on foreign critical minerals at the fastest pace and rebuild U.S. dominance in strategic mineral resources.
In March 2025, Trump signed an executive order authorizing emergency measures to boost domestic mineral output in the United States. This executive order permits the disbursement of funding and loan support under the Defense Production Act to drastically ramp up production of critical minerals and rare earth elements and foster the growth of the domestic mining industry across the U.S.
That November, the U.S. Geological Survey (USGS) published the 2025 List of Critical Minerals on its official website. The updated list expanded the total number of designated mineral commodities to 60. Minerals featured on the list qualify for federal financial backing from the U.S. government, and related exploration, mining and refining projects can also receive streamlined regulatory approval.
Regarding the market impact of the U.S. Department of Defense's lithium carbonate reserve procurement plan, SMM (Shanghai Metals Market) pointed out that in terms of volume, the maximum procurement volume over five years stands at approximately 16,200 metric tons of lithium carbonate, equivalent to an annual average of 3,200 metric tons LCE. When broken down on a monthly basis, the procurement quantity only amounts to roughly 200 to 300 metric tons. This volume is insignificant within global lithium salt consumption, and its market influence is far weaker than that caused by demand fluctuations from new energy vehicles and energy storage sectors.
SMM holds the view that this procurement initiative should not be interpreted as incremental demand that can directly reverse the supply-demand balance; the announcement carries greater policy implications rather than material market effects. More precisely, it constitutes a "low-frequency, long-term, strategic procurement" that exerts limited marginal boost to the spot market fundamentals.
"This development does not signify a sudden surge in lithium demand; instead, it serves as a signal that the U.S. strategic stockpiling of critical minerals is transitioning from verbal pledges to concrete procurement implementation," SMM noted. The analysis also stressed that the key follow-up focus lies not on the announced funding ceiling, but on whether formal awards will be issued, which bidders win the contracts, the final transaction prices, and whether deliveries will be completed on an annual basis.
Calculated based on the disclosed upper spending limit of 300 million U.S. dollars, the implied maximum procurement price is about 18,600 U.S. dollars per metric ton, or approximately 134,000 Chinese yuan per metric ton. While this figure does not represent the actual transaction price, it reflects the U.S. government’s heightened emphasis on supply security, supplier qualification verification and long-term delivery reliability.
Beyond the strategic stockpiling of critical minerals, the U.S. Department of Defense has shifted its stance from collaborative development to a more proactive strategic approach. Last September, the U.S. government approved acquiring an equity stake in Lithium Americas to back the Canadian firm’s development of the Thacker Pass lithium project in Nevada, which is expected to become a major domestic source of lithium supply for the United States.
As one of America’s largest lithium mines, the Thacker Pass Lithium Mine in Nevada has long been regarded as a core component of the U.S. domestic lithium supply chain development. Recent major news that the nation’s top lithium mine is poised to commence production marks a pivotal bet for the United States to rebuild its domestic metal supply chains.
According to a June 22 report by The Information, Phase 1 production at Thacker Pass, the lithium mine with the largest known reserves in the U.S., is scheduled to launch by the end of next year, with an annual output capacity ten times the country’s current lithium production volume upon launch.
The U.S. government holds a 5% equity stake in Lithium Americas and an independent 5% interest in the Thacker Pass mine, and has provided financial backing for the project via a $2.2 billion low-interest loan issued by the Department of Energy. Jon Evans, Chief Executive Officer of Lithium Americas, stated that the policy landscape has fundamentally reshaped the market dynamic: "The entire landscape has transformed completely from last summer to this summer, and we have been integrated into national energy security policies."
General Motors (GM) has pre-secured the entire 20-year output from Phase 1 of the mine, which can meet the battery demand for around 850,000 electric vehicles, or an equivalent volume of batteries for AI data centers, drones, robots and military equipment. Phase 2 of Thacker Pass plans to extract and process an additional 40,000 metric tons of lithium within the next decade. GM has secured a priority right to purchase 38% of Phase 2 output, alongside an option to acquire the remaining production volume.
Nevertheless, even if lithium ore mining output can be increased, the United States is still confronted with the tough challenge in the lithium refining stage, and it cannot break free from reliance on overseas refining in the short term. As a researcher from the Global Energy Center of the Atlantic Council put it: "Lithium ore itself is useless and has to be refined to produce lithium for batteries."
Lithium raw materials have to be processed and refined to manufacture chemicals applicable to battery cathode materials and electrolyte solutions. In fact, achieving self-sufficiency in the lithium battery industrial chain is far more complicated than anticipated.
Industry statistics indicate that the United States accounts for merely 1% of the global lithium salt processing capacity, with over 75% of its refining processes relying on China, leading to a severe mismatch between resources and processing capacity within its domestic supply chain. According to reports from S&P Global, lithium refining capacity in the region is extremely limited. Only two lithium refineries in North Carolina produce lithium hydroxide, with respective capacities of 15,000 tons and 5,000 tons.
Thacker Pass, the largest lithium mine in the United States, faces the same core concern triggering market anxiety: the lithium resources of this mine are embedded in clay layers, and this extraction technology has never been verified on a commercial scale. Even the CEO of Lithium Americas acknowledged that such uncertainties will keep weighing down the company's valuation until actual production is delivered.
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E-Bike Trends 2026: What's New and What It Means for Riders
2026-07-10
The e-bike industry is evolving quickly. At CABDA Midwest 2026, held February 4-5 at the Schaumburg Convention Center outside Chicago, over 2,300 industry professionals from more than 800 independent bike shops gathered to see what's next. Combined with what debuted at CES 2026 in January, the direction for this year is coming into focus: better batteries, smarter features, stricter safety standards, and more e-bike options for every type of rider.
Here's what's changing in the e-bike world and what it means whether you're shopping for your first e-bike or already own one.
E-Bike Batteries Are Getting Longer Range and Faster Charging
Battery improvements are the defining trend for 2026 e-bikes. Manufacturers are shifting from older 18650 battery cells to higher-capacity 21700 cells, which pack more energy into a similar size. The practical result is that many new e-bike models now ship with 700Wh to 960Wh battery packs, up from the 400Wh to 500Wh range that was common in previous years. Depending on terrain, rider weight, and assist level, these larger packs can deliver real-world ranges of 50 to 80 miles or more per charge on some models.
Charging speeds are also improving. Some 2026 models support rapid charging that can reach 80% capacity in roughly an hour, cutting wait times significantly compared to the 4-to-6-hour full charges typical of older e-bikes.
On the emerging technology side, solid-state batteries made headlines at CES 2026. ProLogium displayed a prototype solid-state e-bike battery, and Donut Lab announced that its solid-state batteries are already shipping in Verge electric motorcycles. Solid-state technology promises higher energy density, greatly reduced fire risk, and potentially full charges in minutes rather than hours. While solid-state batteries aren't yet widely available in consumer e-bikes, the technology is moving from lab prototypes to real production vehicles, which signals meaningful progress for the broader e-bike market in the years ahead.
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