Li-Cycle
Battery recycling's rising star ran out of cash at the Rochester plant it could never finish
- Founded
- 2016
- Closed
- 2025
- Lifespan
- 9 years
- Peak valuation
- $1.7 billion
- Became a unicorn
- 2021
- Country
- Canada
- City
- Toronto
- Sector
- Energy and climate
- Founders
- Ajay Kochhar, Tim Johnston
- Investors
- Glencore, Peridot Acquisition Corp.
- At its peak
- USD 1.7 billion valuation on listing in New York in 2021
- Cause of closure
- Ran out of cash
What did it do?
Li-Cycle was a Canadian company that recycled used lithium-ion batteries. It was founded in Canada in 2016. Its model had two stages: "spoke" sites shredded batteries into black mass, and a central "hub" would turn that into battery-grade material. Rochester, in New York State, was meant to be the first hub.
Why did it shut down?
Li-Cycle merged with Peridot in 2021, listed in New York and raised more than USD 600 million. Rochester's cost estimates rose from an initial USD 560 million towards USD 1 billion, and the company stopped construction on 23 October 2023. The USD 475 million federal loan finalised in November 2024 depended on about USD 89.7 million of equity commitments and USD 173 million of reserves; those conditions were not met and the money was never drawn. Slower electric vehicle growth, falling lithium, nickel and cobalt prices and a shift to cheaper lithium iron phosphate batteries added to the pressure. The company obtained CCAA protection in Canada on 14 May 2025. Glencore took much of the asset base with a bid of about USD 40 million, completed on 8 August 2025.
The story
Li-Cycle's promise was clean: turn the spent batteries of electric vehicles into a new kind of mine. Founded in Canada in 2016, the company would shred batteries at small "spoke" sites and make battery-grade material at a large "hub".
In 2021 a merger with Peridot took it to the New York Stock Exchange at a USD 1.7 billion valuation. Chief executive Ajay Kochhar called Rochester pivotal to the business model. Construction began in early 2022, but cost estimates climbed. On 23 October 2023 the site stopped and the shares lost more than 45% in a day.
What followed was a search for cash. Glencore provided USD 200 million in 2022 and USD 75 million in 2024. The Department of Energy loan rose to USD 475 million, but its conditions were not met and the money could not be drawn. In May 2025 the leadership changed and, the same month, the company entered creditor protection.
In August 2025 much of the asset base passed to Glencore for a bid of about USD 40 million. A billion-dollar idea that never opened in Rochester ended up with its largest creditor.
Lessons for founders
- A government loan commitment is not cash. USD 475 million was signed, but a USD 173 million reserve condition meant not a single dollar could be drawn; read the drawdown terms first and put them in your cash plan.
- When the model depends on one giant plant, a cost overrun stops the whole company. Work out what happens if the budget doubles before you break ground.
- If your product depends on commodity prices, watch those markets as closely as your own accounts. When lithium and cobalt fell, so did the value of what came out of the batteries.
Sources
- Li-Cycle pauses Rochester plant as costs rise (The Globe and Mail, 2023-10-24)
- Li-Cycle's quest to recycle lithium-ion batteries ends in bankruptcy (Canary Media, 2025-05-28)
- Glencore completes takeover of Li-Cycle battery recycling assets (Manufacturing Dive, 2025-08-08)
- Li-Cycle Holdings Corp. Form 8-K press release on CCAA and Chapter 15 (Li-Cycle / SEC, 2025-05-14)
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