Power battery recycling turns to the new blue ocean

20GWh retired batteries per year and highly unbalanced resource layout

According to relevant data, as of the end of June this year, the number of new energy vehicles in China has exceeded 10 million, reaching 10.01 million, of which the number of pure electric vehicles is 8.104 million, accounting for 80.93% of the total.

In addition, the sales of new energy vehicles are still growing exponentially. Many opinions in the industry believe that the sales of new energy passenger vehicles will exceed 6 million this year. With the rapid growth and scale of new energy vehicles, the number of retired power batteries will also increase.

In the next 3-5 years, the average annual decommissioning of power batteries in China will reach 20-30GWh, and the cumulative decommissioning capacity will reach 142GWh in 2026.

As we all know, the biggest difference between new energy vehicles and fuel vehicles is the existence of power batteries.

And power batteries are made of many metal raw materials and chemical substances, such as lithium, nickel, cobalt, manganese, etc. If the power batteries are not properly recycled, the scattered power batteries are likely to cause pollution to the atmosphere, soil, rivers and other environments.

Therefore, at present, power battery recycling has a development significance. It is worth noting that the development of power battery recycling also has important strategic significance in the long run.

The reason is that the full electrification of automobiles will bring about the consumption of a large amount of mineral resources, among which the consumption of resources such as lithium, nickel and cobalt is significant.

According to relevant statistics, at this stage, about 70% of the global lithium reserves are distributed in Chile and Australia, 75% of the nickel reserves are distributed in India, Pakistan and Australia, and more than half of the cobalt reserves are concentrated in the Congo.

Our website has sorted out the development of top 5 lithium mining companies in China. Although China is also developing related resources, it is still highly dependent on foreign countries.

According to forecast data, it is expected that China will achieve full electrification of passenger cars in 2040, and full electrification of commercial vehicles in 2045.

The peak sales of new energy vehicles are expected to be around 40 million. This will also lead to a rapid rise in the demand for lithium, nickel and cobalt resources for power batteries. If no countermeasures are taken, the development of new energy vehicles in China will face the risk of short supply of lithium and cobalt resources.

In the mid-to-late stage, the risk reduction effect of improving the battery recycling level will be better, and improving the battery recycling level is of great significance to deal with China’s resource risks.

In the 100 billion scale market, many companies flooded into the market

Either the price of upstream raw materials has continued to rise since last year, or the strategic significance of battery recycling has been highlighted. Since this year, car companies, battery manufacturers, and battery recycling companies have taken frequent actions.

Some of top 10 lithium ion battery manufacturers have begun to actively deploy power battery recycling. In April this year, in addition to battery manufacturing and sales, BYD’s wholly-owned subsidiary’s business scope also includes recycling and echelon utilization of waste power batteries for new energy vehicles, and research and development of new material technologies.

In May, BMW Group announced that it will join hands with Huayou Cycle in the field of new energy vehicles to create a cooperation model for closed-loop recycling and cascade utilization of power battery materials, and realize closed-loop recycling of power battery raw materials for domestic electric vehicles.

In addition to car companies, power battery manufacturers and recycling companies are also actively deploying. CATL entered the power battery recycling track in 2015 and laid out the field of power battery recycling. In addition, the battery replacement brand EVOGO released by CATL at the beginning of this year will facilitate closed-loop recycling of power batteries.

Gotion Hi-Tech is also one of the main players in the field of battery recycling. At present, Gotion Hi-Tech has deployed a lithium battery recycling production line in Lujiang, Hefei, and a production base including upstream raw materials for power batteries and battery recycling in Feidong, Hefei.

At present, the field of power battery recycling has attracted many companies to enter the market. According to incomplete statistics, as of August 2022, there were 59 existing and planned waste lithium-ion power battery recycling and processing enterprises in China.

The planned and constructed power battery processing EIA approved production capacity reaches 1.93 million tons, and the enterprise plans to process a production capacity of over 4 million tons.

The power battery recycling industry is still in its infancy

Although the prospect points to a market of 100 billion, and many companies are vying to enter the market. Our website has sorted out the top 10 power battery companies in China, which introduced the development of the power battery industry in detail. But at present, power battery recycling has not yet developed to a mature stage.

It is understood that China’s waste power batteries have entered a period of rapid growth in scrapping from 2018 and 2019. In 2020, China’s cumulative retired power batteries will reach 25GWh (about 200,000 tons), and it is expected to reach 116GWh (1 million tons) in 2025.

Expert analysis shows that although China’s power battery recycling has been developing for a period of time, the current amount of waste power battery recycling through formal channels is still relatively low.

And concentrated in Shenzhen, Hefei, Beijing and other cities with greater promotion of new energy vehicles. At the same time, the recycling of power batteries at this stage mainly comes from waste power batteries generated by R&D tests and manufacturing, and there are very few retired batteries that are actually recycled from new energy vehicles.

The reason is that the current situation is not unrelated to the difficulty of power battery recycling. Relevant data shows that at present, Chinese new energy vehicle manufacturers have set up 13,000+ power battery recycling service outlets in 31 provinces (cities), and these outlets mainly rely on the existence of 4S stores.

Some analysts in the industry believe that these car companies may have relatively complete recycling paths, but most of them are currently only in the concept of recycling.

In addition to the difficulty of recycling and dismantling, the recycling industry is also faced with difficulties in echelon, efficient recycling of resources, and difficulty in safety and environmental protection management.

The full life cycle value chain of power battery regeneration is not built by battery recycling companies alone, but should be developed by a cooperative symbiotic ecosystem formed by the upstream and downstream of the industrial chain.