On Tuesday, Li-Cycle announced a deal to combine with Peridot Acquisition Corp., a special purpose acquisition company or SPAC, which raised US$300 million in an initial public offering on the New York Stock Exchange in September. Although subject to regulatory and shareholder approval, if approved, the deal would allow Li-Cycle Holdings Corp. to takeover the NYSE listing, and bring its total recent fundraising to US$615 million.
In an investor presentation, the company projects revenues will hit US$985 million in 2025, representing an 82 per cent compounded annual growth rate. But timing is everything and in 2016, electric vehicle sales were even smaller than today. Kochhar says some investors question whether there’s enough feedstock for the company to recycle, given that few electric vehicles have reached the end of their life.
Li-Cycle employees feed lithium-ion batteries into the shredder at the company’s Kingston, Ont. facility.That explosive growth speaks to growing momentum of the electric vehicle market, especially in the past year. Earlier this month, Citigroup analysts released a report that found electric vehicle sales in Europe shot up from less than 50,000 in January 2019 to roughly 250,000 in December 2020.
“With consumer and auto OEM demand for reliant on incentives, the development of the industry is reliant upon the supply chain to find cost efficiencies and technological improvements,” the report states. “This in theory means battery cell suppliers and chemical companies should generate higher returns” than the automakers.