A Porsche-backed startup is building a massive battery recycling plant to boost Europe's EV industry

A massive battery recycling plant is being built in Germany by Cylib, a startup looking to reduce waste from EV batteries that have reached the end of their life.

Cylib, which is backed by luxury sports car firm Porsche and appliances maker Bosch, on Monday started work on the new site in the town of Dormagen, in the German federal state of North Rhine-Westphalia.

More than 180 million euros ($200 million) is being pumped into the facility, which is expected to span 236,000 square feet and will produce recycled batteries for the electric vehicle industry in Europe.

Cylib says its facility will be the largest end-to-end lithium-ion battery recycling facility in Europe.

It plans to recycle roughly 30,000 metric tons of end-of-life batteries at the facility each year, making it larger in scale than the current biggest plant, Hydrovolt, a joint venture between Swedish EV battery maker Northvolt and Norway-based aluminum and renewable energy firm Hydro.

Hydrovolt has capacity to recycle 12,000 metric tons of end-of-life batteries annually, according to Hydro's website.

Recycled batteries produced by Cylib's new facility are expected to be used by Porsche, which invested in the startup as part of a 55 million euro funding round, a source familiar with the matter told CNBC.

The source, who preferred to remain anonymous as the information is not yet public, added that the plans are still in the early stages and have not yet been formalized.

Asked about Porsche's involvement in the project, a Cylib spokesperson said that investments from partners like Porsche are "strategic," adding that it is working closely with its investors about process industrialization and commercial partnerships.

Battery recycling is a key priority for the