Hyundai Glovis, a logistics affiliate of Hyundai Motor Group, said Monday that it has decided to invest in Korean battery recycling firm ER to take the lead in the global market as the worldwide demand for electric vehicles is expected to increase.

According to the announcement, the two firms signed a share subscription agreement but did not disclose the investment amount or details of the contract.

Hyundai Glovis has secured the rights to ER’s preprocessing technology and relevant facilities through this investment, taking the first step in setting up a value chain for battery recycling.

The processing of used batteries is divided into two parts: preprocessing and post-processing. Preprocessing refers to a procedure that completely discharges a used battery, disassembles it, filters out impurities and creates a composition of cathode and anode materials called “black power” or “black mass” that can be processed further to be converted into commercial commodity metals.

In terms of preprocessing, ER owns patents for the technology to process used lithium-ion batteries through a low-temperature vacuum system. The battery recycling company also has eco-friendly technology for retrieving electrolytes without creating wastewater and carbon dioxide during preprocessing.

Hyundai Glovis plans to develop the preprocessing technology further while setting up footholds in overseas markets such as Southeast Asia, Europe and the US, as well as in Korea, to collect used batteries.

The investment aligns with Hyundai Motor Group’s efforts towards the so-called “city mine value chain” project, which denotes businesses that recycle rare minerals from used batteries. The project is a new growth engine for global automakers because it allows for a stable supply of raw materials for EV batteries such as nickel and cobalt, regardless of geopolitical risks.

To collect more used batteries and transport them for recycling, Hyundai Glovis developed a container dedicated to collecting used batteries and patented it in 2021. The company also recently obtained a lithium battery transport certificate from the International Air Transport Association to expand its transportation routes to the air.

“Hyundai Glovis is focusing its efforts on expanding new businesses such as the recycling of used batteries from electric vehicles while maintaining its existing logistics, shipping and distribution business areas,” said a Hyundai Glovis official.

“In particular, we will have our used battery recycling business set up so that we have a unified system from collection to preprocessing.”