In recent years, with the rapid development of the new energy vehicle industry, the power lithium battery industry has also expanded rapidly, with output and profits soaring, but it has also brought some potential "troubles".
Starting in 2018, the first batch of lithium-ion batteries for new energy vehicles entering the Chinese market will face the issue of end-of-life recycling. It is predicted that by 2018, my country's lithium-ion battery recycling market will have reached a considerable scale, with accumulated waste lithium-ion batteries exceeding 12 GWh and a total disposal volume exceeding 170,000 tons. The recycling market created by recovering metals such as cobalt, nickel, manganese, lithium, iron, and aluminum will exceed 5.3 billion yuan. By 2020, the cumulative disposal volume of lithium-ion batteries for vehicles in my country will reach 200,000 tons. With the development of new energy vehicles and the passage of time, the pressure on lithium-ion battery recycling will increase. In fact, in 2015, the cumulative disposal volume of lithium-ion batteries was 20,000 to 40,000 tons, corresponding to a battery recycling rate of only 2%, or 400 to 800 tons. With the existing recycling capacity, it is undoubtedly a drop in the ocean to shoulder the "burden" of 200,000 tons in the future.
Policies: In full swing, one after another were introduced.
In 2016, the Ministry of Industry and Information Technology and the National Development and Reform Commission jointly released the "Technical Policy for the Recycling and Utilization of Power Batteries for Electric Vehicles," which clearly defined the responsible parties as those who pollute and must clean up the mess. This means that power battery manufacturers and automakers bear an undeniable responsibility for the recycling of power lithium batteries.
In January 2017, the General Office of the State Council issued the "Measures for Promoting the Extended Producer Responsibility System," which determined that the extended producer responsibility system would be implemented for four types of products: electrical and electronic products, automobiles, lead-acid batteries, and packaging materials. The measures also aimed to gradually establish a unified national information management system for the entire life cycle of automobiles and strengthen the management of recycling and utilization of scrapped automobile products.
In early February 2017, the Ministry of Industry and Information Technology, the Ministry of Commerce, and the Ministry of Science and Technology jointly issued the "Guiding Opinions on Accelerating the Development of the Renewable Resources Industry" and "carry out pilot projects for the recycling and utilization of power lithium batteries for new energy vehicles, establish and improve the standard system for the resource utilization of waste power lithium batteries, and promote the cascade utilization of waste power lithium batteries."
Current situation: Imminent, under immense pressure
Data from the Ministry of Industry and Information Technology shows that a total of 674,000 new energy vehicles were produced from 2009 to the first half of 2016. In the near future, the lithium batteries used in these new energy vehicles will face the dilemma of "recycling".
Looking at the current state of lithium battery recycling in my country, the main players in the market are small recycling workshops and specialized recycling companies, lacking a recycling system primarily led by lithium battery manufacturers or electric vehicle companies. Furthermore, domestically produced lithium batteries come in numerous models with inconsistent pack structures, and their assembly processes and technologies vary greatly, placing extremely high demands on the overall technology of the production line during disassembly. The recycling companies in the market also vary in size and have outdated equipment, making it difficult to prevent unqualified companies from illegally recycling used lithium batteries. However, if the recycling is handled by legally registered and tax-paying companies that obtain the necessary qualifications and comply with national standards, these companies will inevitably lack competitiveness in terms of recycling prices. While cascade utilization is theoretically a very good method, it is difficult to implement for current lithium batteries.
Today, the introduction of policies and the development of the new energy vehicle industry have, on the one hand, imposed mandatory measures on companies, and on the other hand, painted a "bright future" for the battery recycling market. For various reasons, many companies have begun to enter the market. These include traditional recycling companies, smelting companies, materials companies, battery companies, and new energy vehicle companies. However, the recycling industry has its own characteristics; relying solely on enthusiasm without technological accumulation makes it difficult to achieve long-term success.
Difficulties: A path strewn with thorns, surrounded by enemies on all sides.
Despite numerous calls for recycling, during my visits to various first-tier cities, I found that many scrap metal recycling stations do not accept power lithium batteries. Some scrap dealers stated, "We can handle lead-acid batteries; we can just disassemble them and sell the lead plates inside. We don't know how to process lithium batteries, so we don't buy them."
The market is astute; the fact that scrap yards won't accept power lithium batteries proves that recycling these batteries is "unprofitable." Traditional recycling methods, like plastics, paper, and metals, have long formed a closed loop from production to recycling to reuse. Companies don't need to actively seek them out; they'll "come to them automatically." Power lithium battery recycling clearly doesn't reach the same level of closed-loop system as traditional material recycling. From a profit perspective, taking the cost of recycling 1 ton of waste lithium iron phosphate power lithium batteries at 8540 yuan as an example, the revenue from recycled materials is only 8110 yuan, resulting in an actual loss of 430 yuan.
The main reasons for the "awkward" situation of "recycling" are as follows.
Firstly, there's the theoretical aspect. Power lithium batteries are key components of new energy vehicles, and their recycling technology is far more complex than that of smaller batteries, involving a wider range of disciplines including chemistry, materials engineering, electrochemistry, mechanical engineering, and automotive engineering. Previously, recycling companies only needed some understanding of the battery industry; now, they also need to understand the automotive industry. Customer needs have changed, and the company's existing theoretical foundation must be upgraded.
Secondly, there's the issue of the power lithium batteries themselves. Recycling companies receive batteries of various shapes, sizes, specifications, packaging forms, designs, and series/parallel configurations, along with diverse service lives, vehicle models, and operating conditions. This necessitates the use of multiple packaging fixtures during dismantling, making large-scale batch dismantling difficult and hindering "cascade utilization." Furthermore, dismantling power lithium batteries involves heavy metals and organic electrolytes, raising environmental concerns. Every step is crucial for the recycling and reuse of power lithium batteries. The completely different battery system designs make it impossible to use a single dismantling line suitable for all battery packs and modules, resulting in extreme inconvenience during dismantling. In China, most dismantling relies on manual labor, and the skill level of workers directly impacts the efficiency of the battery recycling process. Additionally, due to the high energy content of the battery packs, short circuits and leaks can occur, potentially leading to fires or explosions, causing personal injury and property damage.
Thirdly, regarding the secondary use of batteries. Retired lithium-ion batteries still retain 70%-80% of their initial energy; direct dismantling and recycling would be wasteful. Therefore, the ideal approach is to first utilize retired batteries in a secondary manner, such as manufacturing energy storage devices for home use, power banks, backup power supplies, and emergency power supplies. After obsolescence, they can then be recycled. However, in practice, the appearance, installation, power interfaces, signal interfaces, protocols, and voltage levels of the assembled batteries must be standardized. Due to the poor consistency, low quality, and lack of safety and stability of retired batteries, secondary use is not yet suitable until the technology matures.
Fourthly, there are technological aspects. Commercializing the direct recycling of high-value-added intermediates such as cathode materials, anode materials, electrolytes, and separators from spent lithium batteries is extremely difficult. Furthermore, the complexity of manufacturing and design processes for different battery types, their series and parallel connection configurations, service and usage time, and the diversity of vehicle models and operating conditions all affect the complexity and safety of dismantling. Traditional hydrometallurgical processes and manual dismantling techniques cannot address the environmental and safety issues arising from the complex structure of power lithium batteries, in addition to the challenge of directional material synthesis.
Fifth, the construction of a business model. The recycling system for power lithium batteries is complex, involving numerous stakeholders such as automakers and battery manufacturers. Furthermore, the structures, material systems, and application carriers of power lithium batteries vary significantly among different automakers, resulting in different lifecycle end-of-life models. In addition, the international leverage of strategic resources such as cobalt, nickel, and lithium makes it difficult to simply replicate other recycling models for power lithium batteries. Establishing a comprehensive recycling system urgently requires collaboration among automakers, power lithium battery companies, recycling companies, and government departments.
The Future: Advancing Technology, Holding onto Hope
The power lithium battery recycling industry urgently needs the introduction of relevant policies, with national-level incentive and penalty measures for power lithium battery recycling. Although, under the fundamental national policy of environmental protection, no company dares to cross the line—even simply storing used batteries in warehouses to comply with regulations can prevent large-scale secondary pollution in the absence of oversight—at this stage, diverse incentive and penalty measures, including fiscal and tax incentives, are needed to promote the development of power lithium battery recycling, depending on the different implementation situations of the policies.
Furthermore, efforts to recycle and reuse power lithium batteries require further improvement in standardization and stronger implementation. It also necessitates the complete recording of operational data during the service life of power lithium batteries. Manufacturers utilizing these batteries for secondary applications can then establish lifespan models for battery modules.
BatteryChina.com believes that only through continuous technological research, improving metal smelting efficiency, and reducing costs can new business operation models be established to generate profits for the power lithium battery recycling industry. Regarding derivative products from the secondary use of power lithium batteries, customers, even when informed, may have concerns about product performance, lifespan, reliability, and safety, which may hinder product promotion. In promoting and applying these products, it is crucial to fully consider the current situation and needs of customers, combining various business operation methods to maximize profits for customers while also securing one's own. Successful experiences from other industries can be readily learned from, such as installment payments, time-sharing leasing, profit-based settlement, managed operation, and even free supply and other value-added services, to explore effective business models for secondary use.
Currently, the operational model of China's automotive lithium battery recycling industry is still in the exploratory stage. It requires the upstream and downstream sectors to form an industry alliance, establish a healthy industrial chain, and find viable profit points. In the future, as the industry expands and industry standards and laws and regulations are gradually improved, recycling channels and recycling costs will become the core of competition in this industry.
