A significant milestone for power lithium batteries has arrived as scheduled – the early power lithium batteries installed in new energy vehicles have gradually completed their mission and are "retiring." What awaits them may be replacement, idleness, or abandonment. Of course, there is another extremely valuable "destination": they will be re-equipped and deployed in a new "battle."
2013 marked the beginning of large-scale promotion and application of new energy vehicles in my country. Based on the average lifespan of power lithium batteries, this year will see the first small peak in the retirement of power lithium batteries. According to the Power Lithium Battery Application Branch, the amount of retired power lithium batteries in my country will exceed 32 GWh in 2021; looking ahead to the next five years, the cumulative amount of retired power lithium batteries in my country will exceed 330 GWh. Considering the exponential increase in the amount of retired batteries in the future, this market size will exceed 100 billion yuan by 2030.
Clearly, with the arrival of a huge opportunity in the market for recycling retired power lithium batteries, a new blue ocean market worth hundreds of billions of yuan is gradually emerging.
A "New Battlefield" for Retired Power Lithium Batteries
Currently, there are two main directions for recycling retired power lithium batteries from new energy vehicles: one is to reuse retired power lithium batteries that meet the energy degradation level; the other is to recycle and reuse retired power lithium batteries that cannot be reused. "Doing a good job in the reuse of retired power lithium batteries is an important foundation for the healthy development of the new energy vehicle industry." In the view of Li Jianlin, Dean of the Energy Storage Technology Research Institute of North China University of Technology, the rational use of retired power lithium batteries has significant economic and social value.
It is understood that the application cases of retired power lithium batteries for cascade utilization are mainly concentrated in communication base stations, UPS power supplies, solar street lights, and other small-scale energy storage fields, with lithium iron phosphate (LFP) batteries being the primary battery type used. According to the Power Lithium Battery Application Branch, the total retired LFP battery volume in my country from 2021 to 2025 is estimated at approximately 114 GWh. Based on a 70% retired capacity and a 60% cascade utilization rate, the cumulative usable LFP cascade battery capacity from 2021 to 2025 is approximately 47.8 GWh. It is understood that the repurchase price of cascade utilized batteries is approximately 30% of that of new batteries. Considering the reduction in subsidies for automakers and the release of battery production capacity, there is a downward trend in the price of power lithium batteries, and the repurchase price of cascade utilized batteries is also expected to decrease accordingly. Based on a 5% annual decrease in the repurchase price, the cumulative market value of cascade utilization of retired power lithium batteries in my country will exceed 17 billion yuan by 2025.
For retired power lithium batteries that cannot be reused, recycling and reuse are important, especially the recovery of precious metal materials such as nickel, cobalt, and manganese.
It is understood that the price of raw materials for power lithium batteries is currently rising. In the future, as the production of electric vehicles increases, driving up demand for power lithium batteries, their prices are likely to continue to rise.
At the same time, the considerable value of recycling raw materials from retired power lithium batteries is gradually becoming apparent.
It is understood that among the current mainstream types of power lithium batteries, ternary lithium power lithium batteries have greater dismantling and recycling value. Taking the mainstream NCM622 system as an example, according to incomplete statistics from Battery my country Network, based on a 95% recycling rate, the recoverable nickel, cobalt, manganese, and lithium content in every 1 GWh of retired NCM622 batteries is approximately 597 tons, 200 tons, 187 tons, and 119 tons, respectively.
In fact, as companies have gradually realized the economic benefits of recycling retired power lithium battery materials, many companies have added "recycling of retired power lithium battery materials" as a new avenue for raw material supply.
It is worth noting that, according to the forecast of the Power Lithium Battery Application Branch, from 2021 to 2025, the total amount of retired ternary lithium batteries in my country will be approximately 200 GWh; the recovered amounts of nickel, cobalt, manganese, and lithium will be 139,000, 28,800, 28,600, and 23,600 tons, respectively. Assuming a comprehensive recovery rate of 97% and unchanged metal prices, the domestic market value for the recycling of nickel, cobalt, manganese, and lithium is expected to exceed 40 billion yuan from 2021 to 2025.
Looking at both the secondary use and recycling of batteries, it's easy to see that, based on the timeframe of 2021-2025, the total market value in my country alone has exceeded 50 billion yuan. It is foreseeable that in ten years, by 2030, my country's market for the recycling of retired batteries will become a "hundred-billion-yuan blue ocean."
Preparing for a future market worth hundreds of billions
With the surge in the number of retired power lithium batteries in China, and recognizing their immense untapped value, many domestic companies have embarked on their own "gold rush" journeys. Currently, the majority of the "legitimate" players in the domestic retired power lithium battery recycling industry are third-party recycling companies, among which GEM Co., Ltd., Huayou Cobalt Co., Ltd., and Tianqi Lithium Co., Ltd. are among the earlier players.
As a leading company in China's power lithium battery recycling and processing industry, GEM Co., Ltd. has signed power lithium battery recycling agreements with hundreds of well-known OEMs and power lithium battery manufacturers worldwide, including BYD, BAIC New Energy, NIO, and CATL. In the field of dismantling and comprehensive utilization of retired power lithium batteries, GEM has formed a complete closed loop in Wuhan, Jingmen, and Wuxi, encompassing power lithium battery recycling, fine dismantling, cascade utilization, and material remanufacturing.
Since entering the field of new energy vehicle power lithium battery recycling, Tianqi Group (which holds a controlling stake in Shenzhen Shenshan Special Cooperation Zone Qiantai Technology Co., Ltd.) has established a relatively complete industrial chain from recycling and dismantling to trading. In the first half of last year, it won several TSLA project orders, becoming the "designated plant" for TSLA power lithium battery recycling and processing. In December 2020, Tianqi Group continued to increase its investment in the power lithium battery recycling field, planning to spend 292 million yuan to acquire a 38% stake in Jiangxi Tianqi Jintaige Cobalt Industry Co., Ltd.
It's worth noting that in December 2020, the national government also released significant news regarding the recycling and utilization of power lithium batteries: the long-awaited second batch of companies meeting the "industry standard conditions for the comprehensive utilization of waste power batteries for new energy vehicles" and related management regulations were finally announced. This comes more than two years after the first batch of "whitelist" companies was announced in September 2018. This new whitelist expands the number of legitimate domestic power lithium battery recycling companies from 5 to 22. Well-known companies such as Blue Valley Smart, Yinlong New Energy, Saidemei, BYD, and GEM are all included. The timing of the announcement last month is quite significant, not only timely but also undoubtedly giving a strong boost to domestic companies entering the market.
While domestic companies are actively preparing for the future "hundred-billion-yuan blue ocean" of my country's power lithium battery recycling market, foreign companies are also making frequent moves in the field of retired power lithium battery recycling. In fact, many companies, including TSLA, Amazon, and Panasonic, have set their sights on the retired power lithium battery recycling business. Among them, the news from TSLA, a benchmark in the new energy vehicle industry, has attracted the most attention. In September 2020, TSLA announced the launch of its power lithium battery recycling service. Reportedly, any type of TSLA power lithium battery that users are dissatisfied with can be recycled, achieving 100% resource recovery.
It's easy to see that, as a major market trend, an increasing number of companies in the power lithium battery industry chain are investing in power lithium battery recycling, actively building a closed-loop system for the entire lifecycle value of new energy vehicles centered around their respective segments. As the final stage of the power lithium battery's lifecycle, the value of recycling retired power lithium batteries is gradually becoming apparent. It is believed that in the future, the "alchemy" of recycling retired power lithium batteries will truly shine, beginning its even more spectacular performance. At that time, the "retired" power lithium batteries will transform from a burden into "treasures," gaining a new lease on life. Undoubtedly, the future global market value of this sector will be enormous, and companies with foresight will gain a competitive advantage.
