KUPPENHIEM, Germany—Mercedes-Benz is constructing a state-of-the-art factory here to recycle electric vehicle batteries. The facility will establish a close-loop system for raw materials.

The first stage of the plant—mechanical dismantling of EV batteries—will ramp up later this year, followed by a hydrometallurgy pilot plant. Eventually, the battery recycling factory will cover every step, from dismantling at the module level to shredding, drying and processing of materials.

The recovered materials will be used to produce more than 50,000 battery modules for new Mercedes-Benz vehicles.

"This foundation symbolizes the decisive step toward closing the material cycle for batteries,” says Jörg Burzer, member of the board of management responsible for production and supply chain management at of Mercedes-Benz Group AG. “With a recycling rate of more than 96 percent, a 'mine of tomorrow' is being created in Kuppenheim.

“The innovative technology approach enables us to incorporate the valuable raw materials into new Mercedes-EQ vehicles,” explains Burzer. “We are expanding our expertise of the battery value chain and are taking an important step in our strategy toward 'Electric Only.’”