General Motors Co. and battery cell manufacturing partner LG Energy Solution are partnering with a Canadian company to recycle battery cell manufacturing scrap — a move that aims to achieve environmental goals and cut costs.

Ultium Cells LLC, a joint venture between GM and LG, will work with recycling company Li-Cycle Corp. to recycle up to 100% of the material scrap from battery cell manufacturing with 95% percent of the materials going to the production of new batteries or for adjacent industries, the automaker said.

Figuring out the recycling of raw battery materials, including lithium and cobalt, is an important step for all automakers to make, experts say, one that will continue to be important as automakers increase electric vehicle production.

“The more material that you can recycle and recover, either from production scrap or from end-of-life batteries, every pound that you can get from those sources is one less pound that you have to mine and process in virgin materials,” said Sam Abuelsamid, principal analyst at Guidehouse Insights. He added that there’s “potentially huge savings if they can use recovered materials rather than virgin material for the batteries — and the environmental impact is also huge.”

But GM and LG do not know yet if the raw materials recycled and sent to Li-Cycle can then be reused in their Ultium battery production process.

“We’re going to investigate that,” Pablo Valencia, GM’s senior manager of battery lifecycle, said in an interview Tuesday with The Detroit News.

And as far as if this will save GM and LG money, Valencia said: “We don’t know that yet, but a really important point is that this recycling contract is a positive value to the material coming out of the plant.”

Historically, lithium ion recycling “has cost more than what it was worth,” Valencia explained. But then came a new wave of recyclers like Li-Cycle with processes that know “how to extract the highest level of value out of the scrap material.”

“It’s a game changer,” he said. “It’s a complete game changer.”

Raw materials represent the majority of the cost in battery cells. Automakers, including GM, want to offer EVs at a range of prices, and lowering battery cell production costs could help.

“We’re anticipating that the recycled material will provide an increase in flow of material into the market, and more material in a market always reduces costs,” Valencia said.

Since 2013, GM says it has recycled or reused 100% of the battery packs received from customers, including any packs replaced in a warranty service. Most GM EVs are repaired with refurbished packs.

GM has a goal of diverting more than 90% of its manufacturing waste from landfills and incineration globally by 2025. The automaker earlier this year set a goal of carbon neutrality by 2040.

“Efforts to ensure the recyclability of batteries and materials reflect the company’s broader efforts for reducing waste in manufacturing and sustainability in manufacturing,” said Stephanie Brinley, an automotive analyst at IHS Markit, in a statement. “In terms of battery manufacturing and electric vehicles, this is GM following through on environmental targets and commitments.”

GM’s new Ultium batteries have a modular design, which makes them easier to reuse or recycle, the automaker said. The batteries will be recycled through a process called “hydrometallurgical,” which emits 30% less greenhouse gas than traditional processes.

The automaker has two battery cell sites planned with LG. The first one in Lordstown, Ohio, will be up and running by early 2022. A second one in Spring Hill, Tenn., is expected to come online in late 2023.

Ultium Cells awarded Li-Cycle “a multi-year contract” to receive scrap from the Lordstown battery cell facility to eventually turn it into new battery-grade materials, according to the recycler’s press release on the partnership. Financial details of the partnership weren’t released.

“Our combined efforts with Ultium Cells will be instrumental in redirecting battery manufacturing scrap from landfills and returning a substantial amount of valuable battery-grade materials back into the battery supply chain,” said Ajay Kochhar, Li-Cycle’s president and CEO and co-founder, in a statement.

Li-Cycle, which is preparing to go public this year through a publicly-traded special purpose acquisition company, just recently said it’s building a third battery material recycling plant in North America.

These plants, referred to as “spokes,” will process production scrap and end-of-life batteries, forming a “black mass” of battery materials to be separated from the copper and aluminum before being sent to Li-Cycle’s Rochester, N.Y., “hub” operation to be broken down into raw materials. The hub is still in the development stage and should go online by 2023.

“We definitely will continue to roll out our spoke network,” said Kunal Phalpher, Li-Cycle’s chief commercial officer, in an interview.

Each spoke can handle 5,000 metric tons per year of material, he said. That’s equal to about 10,000 EVs annually “and that’s not going to be sufficient as we scale up here and the industry scales up, we will definitely need more spokes.”

The “hub” is designed to accept feeds from 12 spokes, he said.

Li-Cycle has worked with other automakers on recycling initiatives, though it didn’t specify which ones. But Phalpher noted that those partnerships “provide recycling services for their after sales departments. This new partnership with Ultium is unique as it pertains specifically to the battery scrap in Ultium’s battery manufacturing process, which Li-Cycle will recycle — bringing the raw materials back into the battery supply chain.”

Other automakers are also thinking about the potential that comes with recycling raw materials. Volkswagen Group Components in January opened the German automaker’s first plant for recycling electric car batteries in Salzgitter, Germany. The pilot plant aims to recover raw materials such as lithium, nickel, manganese and cobalt with aluminum, copper and plastics, to hit a recycling rate of more than 90% in the long term.

“Recycling materials from battery production, of course, is a good first step towards improving the sustainability of the process, but as production scales it is also an obvious way to improve efficiency and even lower costs eventually,” Michael Ramsey, an analyst at research firm Gartner Inc., said in a statement. “Hopefully the recycling of these materials will lead to better processes for recycling the batteries themselves when they go out of service 10 or 15 years from now.”