Northvolt, the Swedish challenger to China’s domination of the electric-vehicle battery market, plans to build a large-scale recycling plant to recover supplies of precious metals needed for production.

The goal is to get the facility running by 2022 and provide half the cobalt and other metals needed to make new battery cells eight years later, Northvolt CEO Peter Carlsson said in an interview.

Northvolt, started by two former Tesla executives, is Europe’s best hope for narrowing the gap with Asian rivals commanding the growing market for vehicle batteries. France and Germany are leading governments efforts to develop a domestic EV industry, and battery recycling would go some way in meeting the need for raw materials.

“There’s a pretty significant export flow of used batteries to China, and that’s stupid,” Carlsson said. “It’s important to keep these flows within Europe.”

Northvolt, after raising $1 billion to finance the first phase of an electric-vehicle battery plant, is preparing for a rise in European demand. As governments sweeten incentives for consumers to buy cleaner vehicles, momentum is building in the region, already the world’s second-biggest EV market behind China and ahead of North America.

Recycling used batteries is also gaining ground as the auto industry grapples with finite supplies of raw materials. China plans to boost its recycling capacity to 1 million tons annually by 2030, from about 60,000 tons, according to BloombergNEF.

Northvolt also faces local competition from Germany’s Duesenfeld and Belgium’s Umicore, which recycles batteries for Tesla at a plant south of Antwerp. More entrants are expected, potentially creating a crowded field in some early stages of the recycling process, Carlsson said.

“There are few players today that can take a battery from an end customer, dismantle it, grind it down and fully reuse it to build a new battery,” he said. “As far as I know we will be the only company with that capacity.”

Given Asian recyclers have well-established supply chains, European companies seeking material need to be “very savvy,” according to Hans Eric Melin, founder of Circular Energy Storage. Currently, the cost of recycling is higher than the value of raw materials extracted, but that may change as processes become more efficient, and recyclers would then have to buy used batteries instead of getting paid to recycle them.

Regardless of market dynamics, Melin sees a big advantage for companies that can use recycled material in their own production.

“What Northvolt wants to do is spot on,“ he said. “They make everything from precursor to cathode materials and finished cells.”

The Swedish company aims to grab a 25 percent share of the European battery market, which would require building several more factories at a later stage. The first cell at its Vasteras pilot plant was produced this month.

Northvolt already claims $13 billion worth of orders in hand, enough to cover its first five years of production. It’s attracted a further $1 billion from Volkswagen Group for a battery joint venture in Salzgitter, Germany.