The world’s biggest auto makers are betting that recycled material from old batteries will help supply the metal they need to build electric cars. The latest wager is on a startup that says it can take advantage of the Inflation Reduction Act. Jaguar Land Rover and South Korean conglomerate SK Group are among the investors putting more than $300 million into Ascend Elements, a startup that aims to serve an emerging center of battery production in the Southeastern U.S. The company says it has an efficient way to turn used lithium-ion batteries into new components. Other investors include Fifth Wall, a venture investor with a clean-energy focus.

The funding is split between equity and debt and values Ascend at more than $500 million. Ascend and other upstarts such as Redwood Materials Inc. and Li-Cycle Holdings Corp. have said they would spend billions of dollars to supply battery makers with the inputs they need. Recycling startups typically break down old batteries or scrap material from manufacturing, then use chemical processes to produce components that can go into new batteries.

The recyclers are jockeying for large customers that need more of those materials to meet their electric-vehicle goals. Car makers are trying to limit their dependence on China, which dominates the battery supply chain. Investors are pouring money into recycling in part because nearly all new mines and processing facilities in the U.S. face local opposition due to worries about environmental damage. That typically stalls progress and means it takes up to a decade or more to get projects up and running.

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Amrith Ramkumar, The Wall Street Journal
Image: Joshua Dudley Greer, The Wall Street Journal